Is professional financial advice right for you?

Read time: 3 minutes

Reaching any financial goal has a distinct path. How you invest, how much you save, and what you want to do with your savings are all important steps on the path. And you may benefit from a partner to guide you and take each of those steps with you. Financial advice can be that partner.

What is financial advice?

Financial advice is personalized guidance aimed at helping individuals manage their money, make informed decisions, and achieve their financial goals. This is more than financial education, which offers investors the tools and resources to help them make their own choices. Think of financial education as the starting point.

Financial advice can help you make decisions about choosing investments and managing your money. Of course, you aren’t going to take advice from just anyone—especially when it comes to your finances. Whether it’s for a specific situation or on an ongoing basis, you want to get financial advice from a trusted provider.

How to decide if financial advice is right for you

Ask yourself if you have three things—time, willingness, and ability. Do you have enough time to manage your accounts yourself? Do you want to make your own financial decisions? And do you trust the choices you’re making? If the answer to any of those questions is no, then you might consider advice. Three in five people say they want financial advice, so you’re certainly not alone in looking for help.¹

As you decide whether you want to manage your money yourself or seek an advisor's help, consider the five main steps of portfolio management:

If you don’t feel comfortable doing this work on your own, working with a financial advisor could be right for you.

How can financial advice help?

Vanguard research suggests that the value of advice comes in four key areas²:

What types of financial advice are there?

There are three kinds of financial advice services:

What does financial advice cost?

You pay for advice in a few different ways, depending on the service. Most services charge their fee based on the percentage of assets under management (AUM). Think of AUM as your balance being managed by the service. Keep these two figures in mind: the industry average annual fee for robo-advice is 0.30%,⁶ and the industry average fee for a dedicated advisor is 1.00%.⁷ But there are plenty of options at multiple price points, so find a service with a reasonable cost for you. Other pricing models could include a flat rate, an hourly cost, a subscription cost, or some combination.

FOR EXAMPLE

If you enrolled in a digital-advice service and the advisor managed $100,000 for you, you could expect to pay an annual cost of $300.

Keep in mind any expense ratios⁹ or fund fees you may pay are separate from advice costs.

Remember, financial advice can be a helpful guide—and you don’t have to break the bank to find a service that fits you.

Where can you find professional advice?

There are a number of places to look for financial advice. These include investment management companies and brokerage firms (like Vanguard), banks, advisory firms, and insurance companies.

Make sure your advisor has the proper credentials and that they’re licensed. Find out whether they’re registered and licensed with the Securities Exchange Commission (SEC). The SEC has regulatory standards for registered brokers and investment advisors to protect consumers like you. You can find information on an advisor’s credentials to make an informed choice at FINRA’s BrokerCheck.

When considering an advisor, ask them how they’re compensated and if they’re a fiduciary to their clients. A fiduciary is legally required to act in your best interest. They can receive commissions, but these must be disclosed, along with any conflicts of interest.

How to get started

Get a snapshot of your finances—Make a list of your financial accounts, including any balances, income, expenses, your debts, and any other relevant financial information.
Figure out the “why”—Everyone has a goal for their saving and investing. Ask yourself what yours is.
Explore your options—Consider a few options and determine the best one for your needs and budget. You might be eligible for advice through your employer-sponsored retirement plan. Find out if your plan offers advice.

Take control of your financial journey

Managing your money doesn’t have to be complicated. See how Vanguard can help you grow your money and retire with ease …

Find out if your employer plan offers advice

You’re unique—find the personalized advice that fits you.

Discover Vanguard advice outside your employer plan

Explore what advice options are available for your other accounts, like a brokerage account or IRA.

Learn more

Visit our Financial Wellness Hub

Use our free resources to take charge of your finances and feel better about your money.

Whenever you invest, there’s a chance you could lose the money.

Diversifying means having different types of investments. It doesn't guarantee you'll make a profit or that you won't lose money. There is no guarantee that any particular asset allocation or mix of funds will meet your investment objectives or provide you with a given level of income.

Advice is provided by Vanguard Advisers, Inc. (VAI), a federally registered investment advisor. #ligibility restrictions may apply. VAI cannot guarantee a profit or prevent a loss.

¹Source: Joint survey by Intelliflo and The Harris Poll. 2022.
²Source: Stephen Weber, Paulo Costa, Bryan Hassett, Sachin Padmawar, and Georgina Yarwood, The Value of Personalized Advice, Vanguard, 2022.
³Source: "7 in 10 U.S. employees not saving enough for retirement, WTW survey finds,” WTW, July 19, 2022.
⁴Source: Brian J. Scott et al. The Global Case for Strategic Asset Allocation and an Examination of Home Bias. Vanguard, 2017.
⁵Source: McKinsey & Company. From Saving to Spending: A Second Front Emerges in the U.S. Retirement Challenge. 2022.
⁶Source: The average retail advisory fee of 20 robo-advisor competitors who charge a management fee is 0.30% as of May 31, 2023. Note that the services and level of support offered by competitors services may be different from the services offered by Vanguard Digital Advisor. This average was calculated in Morningstar's 2023 Robo-Advisor Landscape report, using fee information from company surveys, Form ADV and 13-F filings, and Morningstar research. Current fees may vary for the competitors considered.
⁷Source: “2023 Robo-Advisor Landscape” by Amy C. Arnott, et al. © 2023 Morningstar, Inc. All rights reserved. Average fee listed in Morningstar’s annual Robo-Advisor Landscape report when receiving advice through a traditional human financial advisor. Note that full-service advisors may provide a different fee structure, like a flat fee or tiered-fee structure based on the level of assets being managed, and may require a minimum asset level to manage the accounts. The average fees do not consider other costs, including underlying product costs, transaction costs, or other account costs.
⁸The expense ratio is what you pay each year to cover the cost of running the fund. To calculate it, fund operating costs are divided by the total amount of money in the fund. The expense ratio is deducted from the fund’s return. You can find it in the current prospectus. With some funds, you may pay additional charges.