How to Cut Through the Jargon and Hire the Right Financial Advisor

Guest Blog Post by Anjali Jariwala:

Interested in finding a trusted individual to help you with your finances? The first thing you'll want to do is cut through some basic jargon. Do you know the difference between a financial advisor and a financial planner? 

Did you know there are over 100 different certifications that financial advisors might have*? That's what the National Association of Personal Financial Advisors says, anyway.

If you've spent any time at all looking into hiring one for yourself, you won't doubt that tiny fact for a moment. You've probably already seen quite a few yourself. If not, just type "financial advisor" into Bing and what comes back is a sea of acronyms... CFA, CPA, ChFC are a few of the common ones.

But we're getting ahead of ourselves here. There's some basic jargon that's confusing, too, namely: the difference between a financial advisor and a financial planner.

Financial Advisor vs Financial Planner

Tooling along through your own self-educating journey in personal finance, you may have noticed there are two phrases thrown around a lot. They're not interchangeable, even though at first glance it's hard to imagine how they could be different.

According to Investopedia, here's the difference:

Financial Advisor: This is the broad category of people who make a living helping people manage their money. It includes stock brokers, financial planners, insurance agents, and even bankers.

Financial Planner: These individuals are also financial advisors. Their chief aim is to help people plan out their financial lives in order to meet long-term goals. They can have specialties and they can hold multiple designations.

Still feeling a little cloudy on the difference? That's because both are very broad categories. Neither is an officially-designated term. One may be a "Certified Financial Planner" or a "Behavioral Financial Advisor", for example, but the phrases on their own mean very little.

In short, anyone can call him or herself a financial advisor or a financial planner. You'll have to look for letters after their name to find out if they're officially qualified to call themselves anything. And that's where those 100+ financial designations come in!

Do You Need One?

With your personal finances, you're always going to be better off if you put in a little effort with self-education. By figuring out how to cut expenses and budget your money, you're investing in lifelong skills that will see you through many of life's challenges.

Even if you can't figure out everything yourself and you want to hire a financial advisor/planner, the more you know going in the better.

Beyond being frugal and curbing your unnecessary spending, you'll eventually need to make bigger, more involved financial decisions about your assets. That's where the professionals can truly be of help. 

Mini-Guide to Finding a Financial Advisor

We'll cover this in more detail another day, but basically you want to look for the following traits in a financial advisor:

  • Screen their credentials. Use the FINRA list to look up financial designations
  • Weed out those who charge based on commission. They have several motivations, one of which is to earn a commission by selling you certain financial products. Fee only planners and advisors are not permitted to take any compensation outside of what their client pays them which reduces conflicts of interest.
  • Look for a fiduciary oath. Financial professionals who are also fiduciaries are sworn by professional and ethical guidelines to put your best interest in mind when giving you advice. 
  • Set up some interviews. Your rapport is crucial to a good outcome with financial planning. Even if you aren't an expert on personal finance yourself, you can tell a lot from a face-to-face meeting. 


Anjali Jariwala is the founder of Financial Investment Tax Advisors, a fee-only financial planning firm serving clients across the United States. Young professionals who are ready to build wealth are often met with obstacles from the very industry that should be helping them. FIT Advisors is a trustworthy alternative to the status quo. We serve physicians and business owners in the wealth accumulation stage as their financial life coach.

Anjali and I became friends after meeting at a conference I asked her to write some thoughts as a guest topic for this site.