Financial Advisory Services

Financial advisory services encompass a range of offerings aimed at helping individuals and businesses manage their finances effectively. These services can include retirement planning, investment management, tax strategies and estate planning, tailored to meet the unique needs of each client. By working with a financial advisor, clients gain access to expert insights that can help them make informed decisions regarding their financial future. Whether someone is just starting to save or managing a significant portfolio, advisory financial services are designed to provide guidance and create strategies aligned with their financial goals.

If you’re not sure how to find a financial advisor, SmartAsset’s free tool can help you connect with fiduciary advisors who serve your area.

What Do Financial Advisory Services Entail?

While financial advisory services typically fall into a few main categories, they generally include any sort of advice or management of one’s finances. For many people, financial advisory services tend to only include portfolio management. However, others may look to advisors for tax planning strategies that could help lower their tax liability.

There are also services that are more holistic, as some advisors help with a wide range of issues that include financial coaching on budgeting, how to plan retirement, how to think about investments and more. In short, these comprehensive advisors may fill the role of a financial counselor or therapist for some clients.

What Are the Different Types of Financial Advisory Services?

Typically, you can group financial advisory services into two main categories: financial planning and investment management. Investment management is a smaller category that involves less interaction with the client. That’s because after initial conversations, the advisor is tasked with managing and investing a pool of assets. However, most advisors will work your personal needs and situation into your portfolio plan. This can include your risk tolerance, time horizon, financial goals and more.

Financial planning is much more in-depth and complete a service. In fact, it may entail a variety of different services that all come together to form your financial life. However, many people search out financial planning services for more specific needs. For instance, if you’re setting up a will or a trust, an estate planning advisor would be most helpful. But if taxes are more your concern, a tax advisor can help.

Investment Management Services

Investment management is one of the better known sides of the financial advisory industry. When you sign up for this service, an advisor or a team of advisors decides how to best invest your money to keep it growing.

If the service is carried out on a discretionary basis, then the advisor(s) will be able to trade your assets as they see fit, without your final approval for any specific trade. Non-discretionary services, on the other hand, require the client to sign off on all trades and investments.

While it can be helpful to work with a financial advisor for investment management services, it’s important to remember that they will take a fee. These typically come as a percentage of your total assets on an annual basis.

It’s also worth noting that you could go the DIY route by building and managing your investment portfolio yourself. It’s certainly possible to invest in a variety of exchange-traded funds (ETFs) and mutual funds and get similar turns to a professionally managed portfolio. And if you go this route, you won’t be paying management fees to an advisor. Of course, the trade-off is that you’ll need to manage your funds all on your own and won’t have the insights and expertise of a professional. You should also know that advisors tend to offer these services in conjunction with the financial planning services discussed below.

General Financial Planning Services

General or holistic financial planning services have less of a tangible return than investment management. However, they can often be even more useful for your needs and goals.

Let’s say you have goals of being able to retire at age 55, put your two kids through college at private schools, be able to pursue your dream career and pay down debts. You may decide that you want to work with a professional financial advisor who knows about the steps you can take to make all of those things a reality.

Financial advisory services typically begin with a meeting or series of meetings. During these, the advisor gathers information about the client’s background and financial health. This process may include gathering information about tax liabilities, total liquid and illiquid assets, estate and inheritance information and anything else deemed relevant. The advisor typically will want to learn about other things as well, such as the client’s tolerance for risk, liquidity needs, investment time horizons and more. All this information can help the advisor craft a plan suited to your specific financial situation.

Sometimes these financial plans can be one-off situations, and you’ll only have to make a single payment. However, the ongoing aspect of financial planning is something that many people choose to take advantage of. Working with an advisor who’s providing you with ongoing financial planning services can be helpful, as it helps account for changes in your financial plans and in other parts of life.

For example, let’s say you decide to move or have another child. Your financial planner can help adjust your financial plan to keep you on track to meet your goals. This could prove invaluable in the long run.

Specific Financial Planning Services

Specific financial planning services are the third and final tier of financial advisory services. As the name suggests, these offerings are narrower in scope.

Someone in need of help figuring out and managing their tax liability in their investment portfolio might think about working with a financial advisor who specializes in tax services as well as a traditional accountant. Or someone who is trying to plan their estate might look to a financial advisor for help writing their will and creating trusts, instead of contracting with the advisor for ongoing services.

Usually, such services are included when someone is working with an advisor for ongoing financial planning services. However, many advisors give the option of one-off services.

Bottom Line

Financial advisory services come in a few different shapes and sizes. You can get more specific, as is the case with investment management and one-time planning engagements. You can also get broad-based planning services that help you meet a wide range of financial goals over a longer period.

Either way, it’s important that you know what you’re looking for when shopping for financial advisory services. There are professionals out there to help you with every part of the process. So be sure you’re working with someone who is ready to help you with your specific goals and needs.

Tips for Finding a Financial Advisor

Finding a qualified financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three vetted financial advisors who serve your area, and you can have a free introductory call with your advisor matches to decide which one you feel is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
Some advisors specialize in specific areas or services. Advisors with the Certified Financial Planner™ (CFP®) credential have expertise in financial planning, while chartered financial analysts (CFAs) have passed a rigorous certification making them experts in the field of investment and financial analysis. Here’s a look at these credentials and other certifications that you may want your future advisor to hold.