What Are the Different Types of "Financial Advisors"?

Everyone has a different financial situation, and they may want to consult a financial advisor for different reasons. Learning about financial advisors can help you determine which financial professional may be right for you.

https://tickertapecdn.tdameritrade.com/assets/images/pages/md/Financial advisors: different types for different needs
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Key Takeaways

  • A financial advisor can help you develop strategies for your specific goals

  • Professional financial advisors operate in your best interest under legal standards

  • Financial professionals who may play a guiding role in your financial life also include stockbrokers and financial planners

A financial advisor can play an important role in your life, whether by helping you plan for retirement or by helping you develop an investing plan.

Fortunately, there seems to be no shortage of financial advisors these days. Financial advisors help people manage their money, but not all financial advisors are the same. Each person’s financial situation is different, and many may want the services of a specialized professional.

You might consider using a financial advisor for a number of reasons based on your financial circumstances. Perhaps you have questions around a specific situation such as buying a house, getting married, or paying for your children’s education. Or maybe you simply need help building a long-term financial road map.

Registered Investment Advisors (RIAs)

Many financial professionals may call themselves financial advisors, but Registered Investment Advisors, or RIAs, are financial professionals who are registered with the Securities and Exchange Commission (SEC) or with a state. Many people turn to an RIA for portfolio management and retirement planning. As a professional who may be working with you for the long-term, an RIA can help guide your investment choices and manage your money throughout life’s stages.

RIAs are able to provide investment advice with regard to stocks, bonds, mutual funds, and other securities. They often recommend what and when their clients should buy, sell, or hold depending on market conditions and their clients’ goals.

RIAs are required to operate under a “fiduciary” standard, which means that advisors put their clients’ interests above their own. They must also ensure they provide investment advice that is given using accurate and complete information. They have an additional duty to disclose any conflicts of interest.

If you’re ready to get one-on-one investment help from an RIA, you might consider TD Ameritrade’s AdvisorDirect® referral program for a free initial consultation. There, you are referred to RIAs in your area who may help you develop customized investment strategies to help you pursue goals such as retirement planning, tax issues, trust and estate planning, as well as portfolio management, which can provide guidance based on a discussion about your specific needs and preferences. Visit TD Ameritrade’s Advisor Referral Program page to learn more.

Certified Financial Planners (CFP®)

One of the most common types of professional designations for financial advisors is the Certified Financial Planner (CFP). A CFP is a credentialed professional who is held to a strict professional standard. Many professionals working in tax, law, or investing pursue this designation. Some insurance professionals may also get a CFP.

To achieve certification, every prospective CFP must have a minimum amount of financial planning experience and pass a board exam that covers financial planning, insurance, taxes, retirement, and estate planning, as well as ongoing education to maintain the designation.

A financial professional acts in your best interest and provides advice to help you plan for an uncertain future with more confidence.

Chartered Financial Consultant® (ChFC®)

Chartered Financial Consultants (ChFC) are different from CFPs, but they are similar in practice. To become a ChFC, a candidate must “successfully complete all required courses and exams, meet experience requirements and ethics standards and agree to the comply with The American College Code of Ethics and Procedures,” according to The American College.

Like a CFP, a ChFC can help you navigate changes in your life with a financial strategy that fits your situation, whether you’re receiving an inheritance, getting married, buying a house, making a career change, or growing your family.

Other Financial Professionals

Other financial professionals may include those who can help you manage your money. For example, stockbrokers can buy and sell securities on behalf of a client, typically for a fee or commission. Investment advisors are financial professionals who can create an investment portfolio based on your goals, timeline, and risk tolerance, helping you build, manage, and transfer wealth.

The Bottom Line

Many financial professionals have roles that go beyond the general term “financial advisor.” Ultimately, everyone has a unique financial situation. Whichever type of financial advisor you choose should have the skills and experience suited for your circumstances.

Financial advisors should be able to assess your financial needs to help you pursue your goals. A financial professional acts in your best interest and provides advice to help you plan for an uncertain future with more confidence.

Ready to start building toward your goal? Plan for tomorrow by contacting TD Ameritrade today to schedule your complimentary goal planning session with one of our Financial Consultants.

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Key Takeaways

  • A financial advisor can help you develop strategies for your specific goals

  • Professional financial advisors operate in your best interest under legal standards

  • Financial professionals who may play a guiding role in your financial life also include stockbrokers and financial planners

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AdvisorDirect has a minimum asset level required. There is no charge or obligation for the initial consultation with the independent advisor.  Once you select an independent advisor, you will pay advisory fees and standard brokerage fees.  Brokerage transactions executed through TD Ameritrade are subject to standard transaction charges.  You should review an independent advisor’s Form ADV, other applicable advisor disclosure document(s) and the AdvisorDirect Disclosure and Acknowledgement Document prior to engaging an independent advisor. The Form ADV contains important disclosure information relative to an independent advisor’s services and fees.  Independent advisors charge an ongoing investment advisory fee for their services.   Independent advisors will pay TD Ameritrade fees for their participation in the AdvisorDirect program.  Those fees will usually constitute a percentage of the advisory fees you will pay your independent advisor.  For additional details about the fees paid to TD Ameritrade and other conflicts of interest, please review the AdvisorDirect Disclosure and Acknowledgement Document and ask your independent advisor about its specific arrangement with TD Ameritrade. You are solely responsible for evaluating any independent advisor that you are considering.

Please note: Under no circumstances should participation by a certain independent advisor in AdvisorDirect be considered an endorsement or recommendation by TD Ameritrade for that particular independent advisor.




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