There's a lot of confusion about what financial advisors actually do. But things needn't be so complicated. Here are five things that you need to know about financial advisors.

1. Some Are Specialists. Some Are Generalists.

The term "financial advisor" is similar to "doctor," in that, like doctors, different types of advisors specialize in different areas. Some financial advisors are experts at 澳洲幸运5官方开奖结果体彩网:planning your retirement, while others may excel at investing in your 澳洲幸运5官方开奖结果体彩网:portfolio for maximum gain.

If you want to know your magic retirement number, seek out a 澳洲幸运5官方开奖结果体彩网:financial planner. If you want to position your estate for maximum tax advantages, find a tax attorney or estate planner. And if you want somebody to tell you the best way to invest your recent inheritance, an investment advisor is likely your best choice. Many advisors have overlapping skill sets, but if you ha🧔ve a complicated situation, a specialist will often be in your best interest.

2. Their Fee Structures Vary

Some financial planners are paid a flat or hourly fee for their services, while those who invest your money may be paid a yearly percentage of the number of assets they manage for you. Othersꦰ are 💯paid from the commissions made from recommending certain financial products.

You should have an idea of which model you're comfortable with before hiring an advisor.

3. Their Education Isn't Necessarily the Same

Becoming a financial advisor doesn't require a degree. Sometimes, all it takes is passing one test.

In other cases, though, advisors go through grueling programs, like the certified financial planner (CFP) program or the 澳洲幸运5官方开奖结果体彩网:chartered financial analyst (CFA) program. These credentials require y꧋ears of experience and a difficult curriculum that takes thousands of hours to complete.

Some financial advisors have college degrees in finance, while others do not. So make sure you ask for details about a potential advisor's education and experience. It should be one of the first things you do when you choose an advisor.

4. They Have Different Legal Responsibilities

Investment advisors have a 澳洲幸运5官方开奖结果体彩网:fiduciary responsibility to their clients. This means that they are placed in a position of trust and, therefore, must put their client's needs ahead of their own. They should be making decisions and taking actions that assure their client is getting the best possible pricing and performance. For example, a financial advisor who has a 澳洲幸运5官方开奖结果体彩网:fiduciary responsibility would have to make trades that benefit their clients befꦡore they could benefit themselves.

澳洲幸运5官方开奖结果体彩网:Broker-dealers, on the other hand, operate under the suitability standard. The key difference is that a broker-dealer operating under the suitability standard is loyal to their company before their client. They still have to make recommendations that are suitable for the client, but they aren't under any💟 obligation to put them 🐻first. It's important to know the difference.

5. They're Not All Rich

The median salary for personal financial advisors was $99,580 in May 2023. That's a strong salary (it's double the national median of $48,060), but it doesn't necessarily make you rich.

The Bottom Line

Finance professionals have different titles and areas of expertise, with varying levels of education. Some work a♔s fiduciaries, while others do not. You should know these differences before you consult a fin🐻ancial advisor. Be sure you are choosing the right professional for the job.