What is a financial consultant?

How to get help with budgeting, investing, taxes and more

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Financial consulting refers to professionals who can assist with your personal financial plan, including budgeting, insurance planning, investments, retirement, tax strategies and more.

But financial consulting doesn’t necessarily refer to a specific type of licensed professional, and the definition of who qualifies as a financial consultant varies widely. We’ll review what exactly a financial consultant does, how financial consulting differs from financial planning and how to find a financial consultant you can work with.


Key insights

  • Financial consultants help you build a financial plan, including investing, budgeting, debt payoff and more.
  • Not all financial consultants are licensed, and financial advisors and planners may offer more services than an unlicensed financial consultant.
  • Costs for hiring a financial consultant will vary based on the services needed and what type of financial professional you hire.
  • It’s a good idea to meet with a financial consultant before large life events (marriage, buying a home, etc.), or when you need investment help.

What does a financial consultant do?

“A financial consultant is a trusted professional with the necessary knowledge and experience to help others with personal and business financial management,” said Terry Parham, the chief financial officer of Innovative Wealth Building.

Financial consultants can help you with many different parts of your financial plan. This may include goal-setting, debt payoff, budgeting, investment planning and more.

Financial consultants are professionals who may or may not be licensed financial advisors. The term “financial consultant” is a general term that can refer to financial planners, tax professionals, financial coaches or a chartered financial consultant (ChFC).

It’s important to understand the differences in the types of financial consultants you can work with, as there are different regulations and standards for each.

Financial consultant vs. financial advisor

While a financial consultant can be a financial advisor, they are not required to be a licensed investment advisor.

Financial advisors are highly regulated and are required to pass certain exams and adhere to standards set by the Financial Industry Regulatory Authority (FINRA) and the Securities and Exchange Commission (SEC). Financial advisors can invest on your behalf, creating and managing your investments for you.

But financial consultants may not be licensed financial advisors and are not able to give direct investing advice or handle your investments. Even if a financial consultant has the ChFC designation, this does not allow them to be an investment manager.

Financial consultant vs. financial planner

Financial consultants vary in their responsibilities and licensing, while financial planners are typically licensed professionals who may have a Certified Financial Planner (CFP) or Chartered Financial Analyst (CFA) designation.

Financial consultants may be able to help with budgeting, debt payoff and general investment education, but a financial planner offers a more full-service approach and the ability to manage your investments for you.

Financial consulting services

Here are a few of the different services that may be offered by financial consultants:

  • Goal-setting: Financial consultants can help you clarify and detail your financial goals. This includes putting together a list of goals and timelines of when you want to reach them.
  • Debt payoff strategy: You can work with a financial consultant to create a debt payoff plan that makes the most sense for you. This may include negotiating rates, consolidating debts or referring you to a debt management provider.
  • Budgeting: Financial consultants can help you put together a budget based on your income and monthly expenses. They can help point out areas where you can save more and be your accountability partner in sticking to the budget.
  • Investment planning: Financial consultants who are licensed may be able to provide comprehensive investment planning services, including choosing a portfolio construction, risk assessment, rebalancing and even executing trades for you.
  • Insurance planning: Some financial consultants can help you pick insurance plans and help ensure your coverage is adequate.
  • Retirement planning: In addition to general investments, financial consultants may be able to help you build a retirement plan based on your goals and timelines. This can include opening retirement accounts, asset allocation strategies and withdrawal strategies.
  • Tax strategies: Some financial consultants may be able to help with general tax planning strategies. But most are not licensed tax professionals and cannot prepare your tax returns for you.

Financial consulting costs

The cost to hire a financial consultant will vary by the type of services you need and what credentials the consultant has. Here are a few various cost estimates for working with a financial consultant:

  • A financial coach with no licensing or credentials may charge $100 for a one-hour session.
  • A ChFC may charge $1,200 for a three-month consulting program.
  • A licensed financial advisor may have no upfront charges, but may earn a commission on investments they sell you.
  • A fee-only financial planner may charge several thousands of dollars for a financial plan, or charge for assets under management (around 1% per year).

» MORE: How to choose a financial advisor

Who needs a financial consultant?

Financial consultants can help you at varying stages of your financial life. Here are a few examples of times when you could benefit from hiring a financial consultant:

  • Just married: Meeting with a financial consultant can help you navigate the world of combining finances, insurance planning and how to handle your money as a new couple.
  • Deep in debt: A financial consultant can help you come up with a clear-cut path out of debt.
  • Just started investing: Guidance from a financial consultant can help steer you in the right direction for your investment goals and risk tolerance.
  • Inherited money: A financial consultant can help you optimize how to responsibly use large sums of money.
  • Close to retirement: A financial consultant can help make sure you’re on track as you near retirement.

As you can imagine, there are countless situations where you would benefit from meeting with a financial consultant to help you navigate big money decisions. But a financial consultant isn’t for everyone. If you feel confident in your financial management, or simply cannot afford to hire a financial consultant at this time, you probably shouldn't. But if you're at a pivotal point in your life and would benefit from some financial guidance, a financial consultant may be for you.

“When should you hire a financial consultant?” said Parham. “When you’re ready, willing and able to make committed steps to improve your financial life. You don’t have to be rich, you just have to be willing and able.”

» MORE: Financial goals and knowledge gaps

How to find a financial consultant

There are several ways to find a financial consultant to work with, depending on your budget, your needs and what services you require. But before you start your search, you’ll want to make sure you are very clear on what type of help you want.

Here are a few questions to ask yourself before searching for a financial consultant:

  • What do I need help with? (investing, budgeting, debt payoff, planning, goal-setting, etc.)
  • Do I want to find someone who can manage my investments for me?
  • What is my budget?
  • Do I want to work with someone who is licensed?

The answers to those questions will help you narrow down who you’re searching for.

Here are a few places to search for a financial consultant:

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FAQ

Are there free financial consultants?

There are free financial consulting services for various communities, depending on your location and income. The Financial Planning Association (FPA) offers free financial planning for underserved communities. The National Foundation for Credit Counseling (NFCC) offers free debt management and financial coaching services. And the Foundation for Financial Planning (FFP) offers free financial planning for consumers in need.

What should I bring to my first meeting with a financial consultant?

When first meeting with a financial consultant, you’ll want to bring your financial statements so you can review your current financial situation. This may include bank and credit card statements, investment statements, debt balances and insurance coverage. You’ll also want a list of financial goals you desire to achieve and a list of questions you have that you want answered.

Do I need to be wealthy to work with a financial consultant?

While some financial advisors and planners have a minimum investment amount for working with clients, many financial consultants do not. You don’t need to be wealthy to work with a financial consultant, as the goal is to grow your net worth over time by working with them. The only minimum you need is to be able to afford their fees.

Bottom line

Whether it’s for budgeting, debt payoff, insurance or tax strategies, working with a financial consultant can help you get clear on your financial goals and optimize your money. But not all financial consultants are licensed investment professionals, so it’s important to understand what you need before hiring one.


Article sources

ConsumerAffairs writers primarily rely on government data, industry experts and original research from other reputable publications to inform their work. Specific sources for this article include:

  1. FINRA, "Chartered Financial Consultant (ChFC)." Accessed Nov. 30, 2023.
  2. The American College, "Chartered Financial Consultant." Accessed Nov. 30, 2023.
  3. Wealthtender, "Financial Advisors." Accessed Nov. 30, 2023.
  4. XY Planning Network, "Find Your Ideal Financial Advisor." Accessed Nov. 30, 2023.
  5. NAPFA, "Find an Advisor." Accessed Nov. 30, 2023.
  6. CFP Board, "Search." Accessed Nov. 30, 2023.
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