Who Should You Call? The Different Types of Financial Advisors in San Diego

According to a 2020 TD Ameritrade report, most Americans hope to retire by the time they’re 67. But it’s one thing to hope and another thing to have a plan. A financial advisor helps you set financial goals and manage your money so that you can actually retire when you want to. 

There are many types of advisors. So if you’re looking to develop strategies or diversify your portfolio, you’ll need to know the right person to contact. 

At Capital Growth, our financial advisors help San Diego residents manage their savings every day. In our guide below, we’ll teach you the difference between the types of advisors and which one suited to your needs.

What are the Different Types of Advisors?

When we talk about financial advisors, we’re really talking about many different jobs that fit into the financial space. There’s no one professional to solve all your problems. That being said, it’s not hard to pinpoint what type of advisor you need once you know what makes each one unique.

Here are the main types of financial advisors available in San Diego and across the country:  

        • Financial Planner
        • Investment Advisor
        • Wealth Manager
        • Broker
        • Robo-Advisor

Now, let’s talk a little bit about each one and see what makes them unique.

What Is a Financial Planner?

Think of financial planners as the all-around option. They can be a person or a company, and they take into account your entire financial life. That means looking at your monthly income, savings accounts, expenses, and more to come up with a plan that helps you hit your annual goals.

Some of the things you may talk to a financial planner about are: 

        • Monthly Budgeting
        • College Funds 
        • Expenses 
        • Emergency Savings
        • Investments 
        • Insurance Needs

There are no federal regulations that control who can and cannot be a financial planner. Basically, anyone can advertise these services online. So it’s important to choose a professional with some accreditations. The certification you’re looking for here is called a certified financial planner (CFP)

The best part about hiring a CFP, or any of the accredited professionals we mention in this article, is that they act as fiduciaries. That means the person or business puts their client’s interests ahead of their own. So if they recommend an insurance plan, for example, they must recommend one that suits their client, not themselves.

Planning is bringing the future into the present so you can do something about it now. - Alan Lakein

Alan Lakein

What Is an Investment Advisor?

When you’re mostly concerned with your investment portfolio — what to trade, sell, or diversify — you want to look for an investment advisor. You don’t need hundreds of thousands of dollars to hire one, but many do require a minimum investment. 

An investment advisor doesn’t just help you choose securities, they’ll also manage them. That means they’ll check them routinely and alter them to better contend against the markets. Firms that work in this space are known as Registered Investment Advisors, or RIAs. 

If you prefer working with an individual, ask them if they are a Chartered Financial Analyst (CFA). These professionals have over 1,000 hours of experience managing securities 

An investment advisor can help you with the following tasks: 

        • Choose Investments
        • Give Risk-Based Advise
        • Rebalance Your Portfolio
        • Brokerage Services 
        • Manage Investment Portfolios

RIAs and other types of investment advisors usually charge an annual fee. This fee is a percentage of the size of your assets. Typical fees range from 1.5% to 3%.

What Is a Wealth Manager?

When you have a high net worth or working capital that reaches the millions or more, then you’ll be on the hunt for a wealth manager. 

Wealth managers offer similar services as your average investment advisor, but they focus on high-asset concerns, such as estate planning and philanthropy. Clients with multiple properties, legacy interests, and charities turn to these experts. 

Ideally, you’ll want a wealth manager that acts as a fiduciary. The higher the net worth, the more likely you can find people willing to put their interests above yours. To weed out the chaff, make sure to search for a CFP.

What Is a Broker?

While searching for a San Diego financial advisor, you may find forums and businesses recommending a broker. That’s because security exchanges require certified professionals to buy and sell. 

Adding stocks or bonds to your portfolio requires a broker. As with our other categories, they can be a person or company. They make money off each purchase or sale request; that’s their fee for acting as middlemen between you and the exchange. 

Capital Growth recommends seeking a financial planner or advisor before reaching out to a broker. Most CFPs and RIAs have brokers or brokerage firms. Unless you want to manage your portfolio on your own, there’s really no point.

Ideal for...

      • Buying Stock & Bonds
      • Selling Equities

Not Ideal For...

      • Planning
      • Retirement
      • Long-Term Investing

What Is a Robo-Advisor?

We have a detailed rundown comparing robo-advisors to traditional advisors here. But the basic idea is that a robo-advisor is software, usually available on your smartphone, that simplifies the retirement planning and portfolio management process. 

Their fees are lower than a traditional advisor. The downside is that you can’t ask a professional for help, and the investment plans are usually broad and geared towards a basic risk assessment.

When Should You Hire an Investment Advisor?

There’s no specific time to begin your road to financial freedom. It’s true that some advisors have a portfolio threshold, but out of all the options above, we believe there is a professional out there that can help you reach your financial goals. 

Sound complicated? Just book a free consultation, and we’ll guide you through the process and help you decide what type of advisor is best for you.

Financial Planning Is Simple with Capital Growth

Are you ready to invest in your future? Consult Capital Growth Inc, San Diego’s financial experts, to set out on your personal plan towards financial freedom.

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