Financial Advisors

Authors: Michael Ernst, Eric Shappell
Editors: Eric Shappell, James Ahn, Ryan McKillip

Introduction

When considering hiring a financial advisor in residency, there are five questions that can help you navigate this decision:

Question 1: Should I hire a financial advisor in residency?

Question 2: What credentials should I look for in a financial advisor?

Question 3: How are financial advisors paid?

Question 4: How much will a financial advisor cost?

Question 5: Where can I find a financial advisor?

 

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THE UPSHOT

Should I hire a financial advisor in residency?

In spite of how it may feel, the financial situations of most residents just aren't that complicated. If you're willing to spend a few hours learning the absolute basics of personal finance, chances are you'll be fine without one. If you're a novice and completely uninterested in learning more about personal finance, you might want to pay for some help.

What credentials should I look for in a financial advisor?

Look for someone with a CFP (Certified Financial Planner), ChFC (Chartered Financial Consultant), or CPA/PFS (Certified Public Accountant / Personal Financial Specialist) designation.

How are financial advisors paid?

By one or more of the following: flat, recurring, or hourly fees, taking a percentage of your portfolio (also call “assets under management” or AUM), or commissions on what he or she sells you. For residents, we believe that advisors with flat fees or hourly rates will usually be the most appropriate and cost-effective way for residents to obtain professional financial advice.

How much will a financial advisor cost?

For the type of advisor we prefer (i.e., flat or hourly fee-only), somewhere around $500-1,000 for a flat fee or $100-250 per hour.

Where can I find a financial advisor?

Check out the National Association of Personal Finance Advisors (NAPFA) website here.  NAPFA is an organization of fee-only financial advisors. Note that some advisors on this site charge AUM fees, not just flat fees or hourly rates.