Key takeawaysAdvice-only financial advisors provide holistic financial planning but don\u2019t manage your assets.Fee structures are typically hourly, project-based or flat-fee.It\u2019s up to the client to implement advice from their advisor, who will provide as much guidance as needed.\u00a0<\/p>\n
The do-it-yourself (DIY) method isn\u2019t just for crafts, hobbies and home improvements. Many people also prefer to build their portfolios, implement investment strategies and manage their assets. Advice-only financial advisors provide financial DIYers with the education, support and guidance they need to successfully manage their investments and plan a successful financial future without handing over their portfolio or paying assets under management (AUM) fees.<\/p>\n
What is an advice-only financial advisor?<\/p>\n
An advice-only financial advisor is a professional who provides financial advice\u2014including budgeting, investing and future planning\u2014through a holistic, educational approach.<\/p>\n
\u201cThe advice-only model prioritizes personalized education to help clients make well-informed financial decisions that they can implement themselves, with the advisor\u2019s guidance,\u201d says Cody Garrett, CFP and educator at Measure Twice Money.<\/p>\n
While they might provide investment advice, they don\u2019t manage your assets. Instead, the advisor sets clients up to manage their own portfolios.\u00a0<\/p>\n
\u201cWe don’t focus just on investments, whereas a traditional advisor might be more interested in managing your assets for a fee,\u201d says Avanti Shetye, CFA and CFP at Wealthwyzr, LLC. \u201cWe [consider] the overall financial plan\u2014[like] generating a specific retirement income, reducing taxes over your lifetime and making sure that you achieve your goals\u2014instead of just [targeting] a portfolio return number.\u201d<\/p>\n
What does an advice-only financial advisor do?<\/p>\n
Managing assets is just one small part of what traditional financial advisors do<\/a>. Depending on who you work with, your advisor might:\u00a0<\/p>\n Give investment advice and non-biased second opinionsProvide personalized financial education to help you make informed decisions and then give ongoing guidance as you implement themCollaborate on a financial plan and work with you to manage and update it as income, goals and life events changeWalk you through processes like rolling over your 401(k), claiming benefits, making trades and changing employee benefit electionsEducate you on tax benefits and liabilities and how to plan your finances in the most tax-efficient mannerRefer you to the best financial advisor<\/a> to manage your portfolio and meet your specific needsHelp you find a broker for life insurance, disability or long-term care, then help ensure they act in your best interestProvide income and asset verification during the mortgage underwriting processHelp you plan for retirement and determine the best time to claim Social Security<\/a>Hold you accountable for implementing advice, making financial decisions and meeting your goalsProvide an extra set of eyes on financial statements, loan applications and tax returnsHow are advice-only advisors paid?<\/p>\n Advice-only advisors are typically paid in one of three ways: hourly, per project or through a flat fee<\/a>, usually charged monthly. They are not paid commissions for any products or services they recommend.<\/p>\n