What is a financial advisor?
A financial advisor is a professional paid to help individuals and families manage money. The Bureau of Labor Statistics, which tracks the occupation as personal financial advisors, says they provide advice to help individuals manage their money and plan for their financial future. Their duties include meeting clients to discuss goals, recommending or selecting investments, helping with education and retirement planning and monitoring accounts. Many also advise on taxes or sell insurance.
"Financial advisor" is a description of the work, not a regulated license. The licenses sit underneath it. A person who gives securities advice for a fee generally registers as an investment adviser representative, a person who buys and sells securities for customers registers as a registered representative of a broker-dealer, and a person who sells insurance holds a state insurance license. FINRA notes that regulation and licensing for financial planners depend on the services offered.
The spelling varies. Federal securities law uses "adviser," as in the Investment Advisers Act of 1940, while firms and the public more often write "advisor." Our guide to financial advisor vs. financial adviser covers the difference, including when a broker may not use either title.
What are the main types of financial advisor?
Investment adviser representatives work for a registered investment adviser, or RIA, a firm paid to give advice about securities. The Investment Advisers Act defines an investment adviser as anyone who, for compensation, is in the business of advising others on the value of securities or on buying and selling them. RIAs and their representatives are fiduciaries. Our guide to the RIA model explains how pure, hybrid and corporate RIAs differ.
Registered representatives, often called brokers, work for a broker-dealer and are paid to buy and sell securities for customers. The Advisers Act excludes a broker or dealer whose advice is solely incidental to its brokerage business and who receives no special compensation for it, so brokers can make recommendations without registering as advisers. They are regulated by FINRA and the SEC.
Dually registered advisors hold both registrations and can act as a broker on one account and as an adviser on another. They are the largest group: FINRA's 2026 Industry Snapshot counted 331,802 dually registered individuals at the end of 2025, more than the 307,921 registered only with a broker-dealer or the 94,562 registered only as investment adviser representatives.
Insurance agents sell life insurance and annuities and, according to FINRA, are regulated by state insurance commissions. Financial planners offer a range of services that, FINRA says, varies from provider to provider, and their regulation and licensing depend on the services they offer. Many hold a planning credential such as the CFP mark.
Who regulates financial advisors?
Investment advisers are regulated by the SEC or by state securities regulators, depending mainly on size. Under SEC Rule 203A-1, an adviser with less than $100 million in regulatory assets under management generally registers with the states, an adviser with $100 million to under $110 million may choose to register with the SEC, and larger advisers register with the SEC. Investment adviser representatives are generally licensed by the states.
Broker-dealers and their registered representatives are regulated by the SEC and by FINRA, the self-regulatory organization for the brokerage industry, which counted 3,184 member firms in 2025.
Insurance agents answer to state insurance regulators, according to FINRA. The same person can hold several registrations at once, so an advisor who sells variable annuities and manages advisory accounts may report to all three sets of regulators.
What is the difference between fiduciary duty and Reg BI?
An investment adviser owes its clients a fiduciary duty under the Advisers Act. In its June 2019 interpretation, Release IA-5248, the SEC said that duty comprises a duty of care and a duty of loyalty, is principles-based and applies to the entire relationship between the adviser and its client.
A broker-dealer follows Regulation Best Interest, Exchange Act Rule 15l-1, which the SEC adopted on June 5, 2019 and which took effect for compliance on June 30, 2020. It requires a broker making a recommendation to a retail customer to act in the customer's best interest at the time of the recommendation, without placing the firm's or the broker's interest ahead of the customer's. The SEC said the standard is met only if the broker meets four component obligations: disclosure, care, conflict of interest and compliance.
The practical difference is scope. The adviser's duty covers the ongoing relationship, while Reg BI applies at the moment a broker makes a recommendation. Both broker-dealers and SEC-registered advisers with retail clients must also deliver Form CRS, a short relationship summary covering services, fees, conflicts and disciplinary history. Our guides to Reg BI vs. fiduciary duty and Form CRS go into more detail.
How are financial advisors paid?
Item 5.E of Form ADV, the SEC's registration form for advisers, lists the ways an adviser can be paid: a percentage of assets under management, hourly charges, subscription fees, fixed fees, commissions, performance-based fees or other arrangements. Each adviser checks every box that applies.
An asset-based fee is an ongoing charge calculated on the value of the cash and investments in an advisory account. Other advisers charge a fixed fee, such as a set price for a financial plan, or bill by the hour. In Form CRS, the SEC requires advisers to describe their ongoing asset-based fees, fixed fees, wrap fee program fees or other direct fee arrangements.
Brokers are generally paid by transaction. In Form CRS, broker-dealers must describe their transaction-based fees, generally referred to as commissions, which are charged when a customer buys or sells an investment. A dually registered advisor can earn both kinds of pay, which is why the capacity in which they act on each account matters. Our guide to fee-only vs. fee-based advisors explains the labels.
What credentials and licenses do financial advisors hold?
Licenses come from exams. The Series 7, FINRA's General Securities Representative exam, qualifies a person to solicit, buy and sell all securities products and has the Securities Industry Essentials exam as a corequisite. NASAA's Series 65 is normally a prerequisite to licensing as an investment adviser representative. NASAA says passing the Series 66 is equivalent to passing both the Series 63, which most states require of broker-dealer agents, and the Series 65, but candidates must also hold a valid SIE and Series 7 at registration. NASAA notes that passing an exam is a prerequisite to a license, not a license itself.
Designations are voluntary and come from private bodies. CFP certification from CFP Board requires a bachelor's degree, completed coursework at a CFP Board registered program, a 170-question exam given in two three-hour sessions, 6,000 hours of financial planning experience or 4,000 hours of apprenticeship experience, and a signed ethics declaration and background check. CFP Board's code of ethics says a CFP professional must act as a fiduciary at all times when providing financial advice.
The CFA charter, awarded by CFA Institute, requires passing three exams and at least 4,000 hours of relevant work experience completed in no fewer than 36 months, and CFA Institute says there are more than 200,000 charterholders. The ChFC, from The American College of Financial Services, requires eight courses and exams and three years of experience in financial planning or a related field.
The Bureau of Labor Statistics says personal financial advisors typically need a bachelor's degree, and that the licenses they need vary with the products they sell.
How many financial advisors are there?
The count depends on the definition. The Bureau of Labor Statistics put personal financial advisor employment at about 299,400 jobs in 2025 and projects 1% growth from 2025 to 2035, slower than the average for all occupations, with about 17,100 openings a year. It reported a median annual wage of $105,070 in May 2025. Our guide to how much financial advisors make covers pay in more detail.
Registration data gives a larger number because it counts everyone licensed, including people who are not in client-facing advisory roles. FINRA's 2026 Industry Snapshot counted 639,723 registered representatives at year-end 2025, 331,802 of them dually registered as investment adviser representatives. Financial ADVSR's count of SEC records finds more than 420,000 investment adviser representatives in the SEC's daily IAPD compilation file and 17,210 SEC-registered investment advisers. Browse them on our financial advisors and RIA directories, and see the trend lines on our financial advisor statistics page.
How do you check a financial advisor?
Registration records are public. FINRA's BrokerCheck covers brokers, brokerage firms and investment adviser firms, and the SEC's Investment Adviser Public Disclosure site covers advisers and their representatives. Both show an advisor's registrations, employment history and any disclosures, such as customer complaints or regulatory actions.
A firm's Form CRS states whether the firm and its financial professionals have reportable legal or disciplinary history, and its Form ADV brochure describes services, fees and conflicts. State securities regulators can confirm a license, and CFP Board's lookup tool confirms CFP certification. Our step-by-step guide to checking a financial advisor walks through each report.
This guide is general information, not investment advice.