What Is a Financial Advisor?

Stephen Mascitti is a lead planning excellence consultant at Northwestern Mutual.

We see the doctor and dentist for regular checkups to make sure we stay in good health. Yet when it comes to finances, many people try to manage their own money instead of using an expert.

Just like other industry professionals, financial advisors bring a lot of experience and specialized knowledge to the table. We’ll explain what a financial advisor is, what they do, the benefits of working with one, and how a financial advisor can help you reach your goals.

What does a financial advisor do?

Financial advisors are qualified professionals who guide you with comprehensive financial planning. They can be your trusted co-pilot to help you plan for the future, manage your money and work toward your family’s goals.

They often have expertise in areas like insurance, investments, retirement planning, preparing for education expenses and estate planning. Some financial advisors specialize in working with business owners or people in a particular career ranging from education to law enforcement to medicine.

What can a financial advisor do for me?

A financial advisor should meet with you to understand you and your money goals. Those might include the vacation you want to take next year, the student loans you want to pay off as quickly as possible, or your dream retirement.

Your advisor should take a holistic approach, going beyond your investments to include insurance, too. This overall picture of your money should reveal the opportunities and blind spots that often go overlooked.

Look for an advisor who is ready to work with you to design and update a tailored financial plan for the years to come. A great match often has the right expertise for your goals, works with other people like you and understands the area where you live.

Your advisor should support you over the years with regular check-ins. They can keep you informed about financial trends and help you adjust your strategy as things change. They’ll continue to ask deep questions to reveal the opportunities and blind spots that you might overlook if you manage your money alone.

Build a comprehensive financial plan

Your advisor should put together a financial plan that details how you and your family will reach your goals. Maybe that’s buying a house, paying off loans, funding college, starting a business or retiring the way you want.

This financial plan is way more than a monthly budget or a recommendation for great stocks and funds to invest in. A comprehensive financial plan takes a broad look at your entire financial picture over time. Your advisor can use it to show you how the different parts of the picture—investments, insurance, savings and debt—work together to get you where you want to be.

Your advisor should help you make sure your plan has the right protection against risk. For example, they can help figure out whether you’ve got enough life insurance to cover your family’s expenses if you pass away. They should also look at whether you’ve got enough disability insurance to replace your income in case you become too ill or injured to work.

A solid financial plan should include flexible ways to grow your money over time. It should also seek to protect your money from the curveballs life will inevitably throw. As the years go by, you and your advisor can decide together how to adjust your plan.

Leave you better off financially and emotionally

Another thing a financial advisor can do is help you feel better about money. After all, it’s common to worry about money. More than a third (36 percent) of Americans say uncertainty about their finances keeps them up at night at least once a month. That number is even higher for Gen Z (44 percent) and is highest among millennials (53 percent), according to Northwestern Mutual’s 2023 Planning & Progress Study.

But only 37 percent of Americans say they currently work with a financial professional, according to the same study. Working with the right financial advisor should leave you better off financially and emotionally. It can be a great step toward your long-term financial security and put your mind at ease.

Put you in touch with other professionals

Your advisor can also give you access to a network of professionals. They can work with your accountant or lawyer—or recommend qualified people in your area. Then this group can help you take steps to help you realize your goals in the most efficient way. Northwestern Mutual’s diverse network of advisors has access to experts across the country who can team up to get you the best solutions.

What are the benefits of a financial advisor?

A good advisor will help you balance risk and reward so that you can feel more confident that you’re on track to reach your goals. Your advisor should help you keep the long-term big picture in mind. Here are some other benefits of working with an advisor:

• You get expert advice—You can make more educated decisions when you’re guided by a professional’s advice. Obtaining and maintaining comprehensive financial expertise takes significant time that most people don’t have.
• You stay on track with your goals—Your financial advisor can help you keep your financial plan in sync with your life. It’s common to update your plan on a regular basis, particularly when you go through a milestone—like getting married, growing your family or preparing to retire. And one of the most important roles for your advisor is to help you stick with your plan—even when the market is down.
• You get the most out of your money—You work hard for your money, so you probably want to get the most from it. At Northwestern Mutual, our approach to planning has been shown to have a higher probability of leading to better financial outcomes over time, according to analysis by EY. Our focus on both growing and protecting wealth over the long term can help clients outperform strategies that emphasize investments alone.

How much money should you have when connecting with a financial advisor?

There is no set amount of money you need to work with an advisor—everyone can benefit from some financial planning. Northwestern Mutual advisors work with a lot of different income levels and can design a plan that meets you where you are in life.

You might also be wondering how an advisor gets paid. There are three main ways: they might charge you a fee, charge a percentage of the assets they help manage for you, or receive commissions from any products or services you buy. Some advisors may even do a mix of each. It’s OK to ask about this.

What credentials should a financial advisor have?

Advisors sometimes pursue professional designations to further their education and expertise. You can see if an advisor has these by looking for designations after their name. The institutions that issue these designations often require the advisor to complete continuing education and to follow a code of ethics.

For example, the letters CFP^® for CERTIFIED FINANCIAL PLANNER™ professional at the end of a name mean they have passed the standards set by the CFP ^® Board. This includes education and coursework requirements in key financial planning topics, as well as passing a certification exam.

You may also come across the letters ChFC^® (Chartered Financial Consultant), CFA (Chartered Financial Analyst) and CLU^® (Chartered Life Underwriter) and many more. These designations indicate specialized training in different areas of financial planning.

What will the first meeting with a financial advisor be like?

Some people are nervous about their first financial meeting. It may help to remember that most advisors enjoy meeting new people—that’s part of why they are in the business. In your first meeting, you and your advisor will get to know each other and explore some details about your money and your goals. You can also ask questions about their style and the company they’re with.

Once your advisor has a good understanding of your goals and situation, you’ll build a financial plan together. It’ll strategically leverage insurance, investments, annuities and other financial tools to move you toward your goals. At Northwestern Mutual, we think about growing your wealth and helping you protect it.

Do I need a financial advisor?

Your Northwestern Mutual financial advisor will provide expertise to offer a broad range of financial solutions. They will get to know you and how you think about money. Together, you’ll handle the big questions about how to grow and protect your money.

This comprehensive view of your money and goals will help you feel confident that you’re on track for the future. And your advisor can help you identify opportunities and blind spots that you might otherwise overlook.

Working with an advisor will help you protect what you’ve already built. You can also work toward superior outcomes. Reach out to an advisor to get started.

Certified Financial Planner Board of Standards Inc. owns the certification marks CFP^®, CERTIFIED FINANCIAL PLANNER™, CFP^® (with plaque design) and CFP^® (with flame design) in the U.S., which it awards to individuals who successfully complete CFP Board’s initial and ongoing certification requirements.

Only those representatives with "Advisor" in their title or who otherwise disclose their status as an advisor of NMWMC are credentialed as NMWMC representatives to provide investment advisory services.