Best Financial Advisors in 2021

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Type “best financial advisors” into your favorite search engine, and you’ll get a variety of results including lists of robo-advisors, hybrid robo-advisors and full-service financial advisors.

Ranking traditional full-service financial advisors is much harder than, say, picking out the best brokerage firms. There are many thousands of advisors, all with different qualifications and clientele.

In this article, I’ll point you toward the “best financial advisor” lists that the Clark.com team respects. I’ll also explain the type of financial advisor that money expert Clark Howard recommends (hint: a fee-only fiduciary) and give you some resources to help you find one.


Table of Contents


What Is a Financial Advisor?

If you’re searching for “best financial advisors,” you may already understand what you’re looking for.

In case you don’t, a traditional, full-service financial advisor is someone who helps you manage your money and assists with financial planning.

Before creating a financial roadmap that’s specific to you, a good financial advisor will learn more about:

  • Where you are now (debts, assets)
  • Where you want to go (goals)
  • Your personal circumstances (family, career)

Financial advisors help oversee your investment portfolio.

But if you’re going to pay the industry-standard 1% annual fee to hire a full-service financial advisor, he or she should offer services well beyond investing help such as:

  • Retirement planning
  • Tax planning
  • Estate planning
  • Long-term health care
  • Charitable giving
  • Insurance strategy
  • Debt management
  • College savings

Trustworthy “Best Financial Advisors” Lists

The financial advisor industry can be lucrative — not just for the advisors but also for the publications that write about them.

It makes sense: The live advisor industry deals with large sums of money. So some of the lists you may find when you search for the best financial advisors are “pay to play.”

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We trust the “best” lists of two major publications: Forbes and Barron’s. Why? For one, you can’t buy your way onto those lists.

In fact, each of the advisors who make on those lists must go through a rigorous review process. That includes at least some of these hurdles:

  • Phone interview
  • In-person interview
  • Lengthy questionnaire
  • Investigation of formal complaints or lawsuits
  • Research into charitable giving and firm staff diversity

Some of the nation’s best financial advisors are concentrated in states with a lot of wealth such as New York and California.

Forbes and Barron’s have lists of the top advisors nationwide. But they also break down the best financial advisors in each state. So no matter where you live, you can use those lists to find successful financial advisors who have been through a rigorous vetting process.

You can check Forbes and Barron’s to read about their selection criteria and research processes in detail.

But one of the filters they use is “assets under management”: the total amount of money invested with an advisor’s firm. It seems that a key tenet of the philosophy behind these lists is that it’s difficult to be a large, growing financial management firm if you’re not doing a good job.

That makes sense because the financial advisor industry is a reputation-oriented business.


How To Find the Best Financial Advisor for You

Hiring a good financial advisor can be one of the more difficult choices in personal finance. However, if you’re willing to work at it, your research can be time well spent.

Here’s a simplified step-by-step guide to finding, vetting and hiring a financial advisor.

1. Make Sure You Need a Financial Advisor

If you’re not looking for advice outside of investing, you probably don’t need to pay a 1% annual fee for a financial advisor. The same is true if you’re decades away from retirement, Clark says.

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He also says you shouldn’t pay any fees to invest your money that aren’t absolutely necessary. A modest difference in fees easily can be worth hundreds of thousands of dollars after decades of retirement investing.

2. Familiarize Yourself With the Term “Fee-Only Fiduciary”

If you do need a financial advisor, it’s important that you hire someone who is:

  1. Legally obligated to put your financial interests above their own. This is called “fiduciary duty.”
  2. Not financially incentivized to sell you certain investment products. Advisors who make money based only on what you pay them are “fee-only,” and that’s what you’re looking for. (Some advisors make commission or fees off the products they sell you.)

Clark is adamant that you should work only with fee-only fiduciaries.

3. Narrow Your Search With Clark-Approved Resources

Outside of the lists from Forbes and Barron’s, there are other great resources to help you locate fiduciary financial advisors near you.

You can also ask friends and family for recommendations, but you need to vet the candidates personally.

4. Interview Your Financial Advisor Candidate

Some have described advisors as the Chief Financial Officer of your family. This person will play an important role in your life, and it’s important to go through an interview process of sorts.

Among other things, you want to:

  • Confirm the person is a fee-only fiduciary
  • Understand the services they provide
  • Understand their investment philosophy

If you want to read more about questions you should consider asking your candidate, go to this article I wrote about that subject recently.


Resources You Can Use To Find Fiduciary Financial Advisors

Perhaps you’ve decided you want to hire a fee-only fiduciary.

If you’re not interested in hiring anyone from the Forbes or Barron’s lists, or if you want more options, there are several Clark-approved resources that you can use.

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You’ll still want to do your own due diligence, but these resources are a great starting point.

  • Garrett Planning Network: This has been Clark’s go-to recommendation for years. The financial advisors within the Garrett Planning Network are all fee-only fiduciaries who charge hourly rates. They can help with comprehensive financial planning or advise you on specific topics such as budgeting, portfolio analysis or college savings.
  • National Association of Personal Financial Advisors (NAPFA): NAPFA is similar to Garrett in that its advisors are fee-only fiduciaries. NAPFA’s advisors are more for long-term relationships rather than short-term consultations. However, NAPFA financial advisors may require an investment of $500,000 or more in order to work with you.
  • SmartAsset: You’ll answer a number of questions about your net worth, timeline and priorities. Based on your answers, SmartAsset matches you with up to three fiduciary financial advisors or firms. If you have less than $100,000 to invest, it typically matches you with firms that charge a flat amount per month rather than an annual fee. Make sure you calculate the annual rate as a percentage of your assets to make sure you’re not paying well more than the industry standard of approximately 1% per year.

What Are These Other Advisor Models?

As I mentioned at the beginning of this story, a search for “best financial advisor” will include results for robo-advisors and online-only hybrid financial advisors.

While these models can be great solutions, their products and services are not the same as you’ll find if you hire a full-service financial advisor.

A robo-advisor is best for people who are looking only for investment advice. Most robo-advisors charge an annual fee of between 0.25% and 0.40%. Robo-advisor algorithms match you with one of several prebuilt portfolios based on your time horizon and risk tolerance. You then make contributions to your robo-advisor over time, which it automatically invests into your portfolio. Robo-advisor portfolios normally lean heavily on ETFs and bonds.

A hybrid financial advisor is best for people who want occasional advice from a professional but are OK with some level of independence in exchange for cheaper annual fees. This model handles your investing through a robo-advisor. However, you also get ongoing access to full-service financial advisors, typically through scheduled phone or video calls.

Sometimes the human advisors at hybrids help shape or customize your portfolio before you get started even though you’ll be investing in an automated, pre-built portfolio.

These advisors can provide most or all of the same services as a full-service financial advisor. However, you probably won’t have a long-term or personal relationship with them, and you may end up talking to a different advisor every time.

The depth and personalization of the financial services the hybrid model offers beyond investing won’t reach the same level as the services of a full-service financial advisor.

Hybrid models tend to charge annual fees between 0.30% and 0.89%.


Clark-Approved Alternatives to Full-Service Financial Advisors

If you’re thinking about hiring one of the best financial advisors but you’re not sure about the traditional, full-service approach, there are three alternatives for you to consider (and the companies Clark likes for each).

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1. Invest on your own. Clark recommends investing in a target date fund or in low-cost index funds. He likes Fidelity, Schwab and Vanguard.

2. Invest via a robo-advisor. Clark.com’s two favorites are Betterment and Wealthfront.

3. Invest through a hybrid robo-advisor. Clark is a big fan of Vanguard’s Personal Advisor Services and Schwab’s Intelligent Portfolios Premium.


Final Thoughts

Finding the right financial advisor isn’t as easy as most people would like it to be. Hopefully, some of the resources and recommendations I’ve shared with you in this article will make it easier.

And it bears repeating one more time: If you hire a traditional full-service advisor, your most important job is to make sure they’re a fee-only fiduciary.


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