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What does a financial advisor do?

The contract names the work: a plan, the portfolio, or both. The custodian sends the statement. Ask which tasks are inside the fee before you sign.

The short answer

"Financial advisor" is a job description, not a license. The work is whatever the contract says you are paying for. In an ongoing advice account, that is often a written plan, a portfolio someone watches or selects, and a meeting when your life changes. In a one-time engagement, it may be the plan only, and then you leave.

They do not sit on the account all day. Trades show up as confirmations from the custodian, the company that holds the securities. The adviser does not replace that statement with a summary on their letterhead.

Inside a full advice relationshipOften a separate fee or a different firm
A plan for goals, savings, and the accountTax preparation by a CPA
Fund or portfolio selection, if the contract includes itLegal documents from a lawyer
Rebalancing on the schedule in the agreementInsurance products, if a broker sells them
Scheduled reviews and a call when the job changesA second specialist the firm hires and bills through
The fee calculation and the invoiceA product commission. Check Item 5E(5)

What to do

  1. Open Search and read Item 5G before the meeting. 5G(1) is financial planning. 5G(2) is portfolio management for individuals and small businesses. A Yes means the firm offers that service. It does not mean your contract includes it.
  2. Ask for the scope in one paragraph: plan only, portfolio only, or both. Ask who may place trades without calling you first. That sentence belongs in the agreement, not only in the sales meeting.
  3. Ask which tasks are inside the fee and which get another bill. Tax returns, estate documents, and a product sale are the usual extras. Get the answer in writing.
  4. Ask who sends the account statement and how often. Match that name to Item 9A. The custody page explains what a Yes means: does my advisor have my money?
  5. Ask how many scheduled meetings are in a year. The count is its own question: how often will I meet my advisor?
  6. If they also have a broker record, ask which part of the work is advice and which part is a product sale. RIA vs broker is the file check.

What to look for on Best Investors

  • Item 5G, not the slogan. "Wealth management" can mean planning, portfolio management, or a platform the firm prefers. The checkboxes are the firm's own list of services.
  • Item 5E next to Item 5G. A long service list with only a commission box is a different product from a long service list with a percent-of-assets box. The cost page is the fee menu.
  • Brochure Item 4. Part 2A describes the advisory business in sentences. If the sentences are narrower than the homepage, believe the brochure.
  • The person vs the firm. The firm is the RIA. The person is an adviser there, a broker, or both. The firm page is where Item 5G lives.

Common mistakes

  • Hiring the title and discovering later that the contract is portfolio management only, with no plan.
  • Assuming every adviser prepares your tax return. Most do not. A tax comment in a meeting is not a filed return.
  • Treating the adviser's quarterly PDF as the official statement. The custodian's statement is the one you reconcile.
  • Paying an ongoing percent for a job that was a single plan. End the agreement when the scope is done, or expect another bill. See what happens if I fire my advisor.
  • Ignoring Item 5G(7), selection of other advisers. You may be paying this firm to hire the next firm. Ask what each one does.

Related questions

Do they pick the investments?

Only if the contract says so. Some agreements let the firm trade without a call first. Some require your OK on each change. Some stop at a written list of funds and leave the clicks to you. Ask which of the three you are signing.

Will I get a written plan?

Ask for it as a deliverable, with a date. 5G(1) means the firm offers planning services. Your engagement letter is what says you are getting one. Advisor vs financial planner splits the plan from the ongoing portfolio.

Who do I call when the market drops?

The agreement should name the contact. A custodian can explain a trade confirmation. The adviser explains whether the plan changed. Those are different calls. You want both phone numbers before you need them.

Is this the same as a robo-advisor?

A digital program still files Form ADV and still has a scope. It will not meet you when the job is a pension choice or a death. Compare the scope, not the logo: financial advisor vs robo-advisor.

Limits

This page describes the usual split between a contract, a filing, and a custodian statement. Your agreement can be narrower. It is not legal or investment advice, and Best Investors is not the SEC.

Item 5G is what the firm checked. We do not sit in the meetings, and we do not grade the plan.

If our copy of the filing and IAPD disagree, use IAPD.

Sources

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