Association of Military Banks of America

Financial Counselor or Financial Advisor? Choosing the Right Financial Professional

By Amy Miller, AFC®

Ready to get your finances in order but not sure where to start? Working with a financial professional can help you get a clear view of your finances, make a plan, and set goals. Like many financial decisions, choosing the right professional will depend on your situation, financial needs, and goals.

Are you unsure which financial professional is right for your needs? Below, we break down the differences between Accredited Financial Counselors (AFC®), and Financial Advisors and Planners and the services they offer their clients that can help you determine which professional is right for you.

Accredited Financial Counselor (AFC®)   

Accredited Financial Counselors (AFC®) are trained to help their clients create a financial plan, set financial goals, and improve money management skills. An AFC® will focus on assisting individuals and families with managing money while working with them to improve their overall relationship with money, adopt better habits, and create a healthier financial future.  

As with all financial professionals, it is important to research the person you are considering and ensure he or she is accredited. Financial counselors with the AFC® designation have completed the Association for Financial Counseling, Planning, and Education’s (AFCPE®) accreditation course that complies with the National Commission for Certifying Agencies (NCAA) educational and testing standards.

It’s important to note that an Accredited Financial Counselor® will not provide investment advice. However, unlike many financial advisors or planners, clients are not required to have a specific amount of assets already accumulated to work with an AFC®. An AFC® will concentrate on assisting clients with their relationship with money, budgeting, debt reduction, and credit building regardless of how much money they currently have.

Typically, for their services, financial counselors charge fees that differ from counselor to counselor. They may charge by the hour, by the session, or via a monthly subscription plan. Many also offer group coaching sessions that help lower costs for attendees.

Active-duty service members, their families, and survivors can access free financial counseling in person, by phone, or by video call through Military OneSource. Contact Military OneSource at 800-342-9647 to learn more. Most installations also have counselors who can be accessed through their family readiness centers and who offer free financial counseling and advice. Veterans can take advantage of one free financial counseling session offered by an AFC® – see below for more detailed information.

Financial Advisors

Financial advisors are professionals who provide investment advice and focus on helping their clients build wealth. Typically, they work with clients who have already amassed a certain amount of wealth. They may work as independent agents or with an investment firm and offer investment management services, estate planning prep, and tax planning.

Registered financial advisors must carry at least one investment license to conduct business with their clients. There are several licenses available but the most common is Series 6, which allows advisors to sell mutual funds and variable annuities and a Series 7 which allows them to sell any type of investment product, including stocks. All advisors with either a Series 6 or a Series 7 are also required to obtain a Series 63 license. Advisors who are paid with fees instead of commissions are further required to have a Series 65 license.

Financial advisors are also paid differently, based on their services, and can be grouped into three main types:  Fee Only, Fee-Based, or Commission Based.  Fee-only advisors charge an hourly fee, a flat fee, or a percentage of the assets they manage. Fee-Based advisors often work with brokers and may earn commissions.  Finally, commission-based advisors are paid based on the sale of an investment product.

Choosing the Financial Professional that is Right for You

Seeking professional financial assistance can help put you on the right path to achieving your goals. Choosing the appropriate professional for your current financial situation and needs is important. In addition to ensuring your financial professional is qualified, accredited, or licensed, you may want to ask if he or she is a fiduciary. Fiduciaries are legally bound to always act in their client’s best interest and to offer clients only products or services that are best suited for them. All AFCs® are fiduciaries but not all financial advisors/planners are, so be sure to ask.   

FINRA’s BrokerCheck webpage will allow you to search by name, location, or SEC# to find an advisor.  It provides information including the individual’s or firm’s registrations, their employment history, license information, and whether any complaints have been filed against them.

To find an AFC®, you can search the AFCPE’s counselor database. You can also verify a counselor’s certification by searching here.

As a benefit through the Veterans Benefit Banking Program (VBBP), Veterans can take advantage of one free financial counseling session offered by the AFCPE. Additionally, the VBBP offers individuals needing assistance with credit or debt management one free credit counseling session with the National Foundation for Credit Counselors.  You can learn more or schedule a free session by visiting the VBBP website