The Role of an Investment Advisor in Building Wealth

Your wealth-building plan can be created with the aid of a financial counselor. They will use a questionnaire to get a complete picture of your assets, expenses, investments and pensions. They can help you save for retirement by helping you choose the right types of accounts. And they can help you reduce your debt and build wealth by recommending tax-efficient strategies.

Asset Allocation

As the saying goes, “Don’t put all your eggs in one basket.” Your asset allocation should consider stocks, bonds, real estate and other financial assets. Generally, investment advisors manage investment portfolios, and their clients include individuals who invest through brokerage accounts, retirement plans or private trusts, and institutions like universities, corporate pensions and endowments. They also may offer advice on other matters such as tax planning, insurance and debt management. Like Fred Baerenz, investment advisors must act in their client’s best interests by their fiduciary duty. They can earn their income through various structures, such as commissions, flat fees or percentages of managed assets. It’s important to understand the fee structure before hiring an investment adviser. You can do this by asking for their Form ADV, which lists how they can be compensated.


Retirement, tax, investment, and estate planning are just a few of the services that financial advisors provide. They might help you create a complete financial plan and a portfolio that aligns with your time horizon, risk tolerance, and short- and long-term goals. Since they must operate in their client’s best interests, many advisors must abide by the fiduciary standard and are certified financial planners (CFPs). They may charge a fee for their services or be paid on commission. Other options include robo-advisors, which provide low-cost automated portfolio management, and wealth managers. Experts like Frederick Baerenz focus on helping clients achieve financial peace of mind, particularly during market volatility. 


Many investment advisors hold professional designations like Certified Financial Planner or Chartered Financial Analyst, which can help them provide more holistic financial guidance. These may include advice on saving for retirement, paying down debt, or creating a budget. While these additional qualifications are not required to become a Registered Investment Advisor (RIA), they can add value. An individual must complete the Series 65 exam to become an RIA. RIAs must also register with the Securities and Exchange Commission or state securities regulators and disclose their fees, investment strategies and potential conflicts of interest on FINRA’s BrokerCheck. RIAs are held to a fiduciary standard, which means they must put their client’s best interests first. They can charge a flat fee, tier their costs, or rely on a percentage of assets under management to determine their fee schedule. All SEC-registered investment advisors must make their fee schedule public on Form ADV.


Investments are crucial to building wealth, allowing you to grow your savings and income. They can also help you fund a comfortable retirement, buy a new home, or leave a legacy for the next generation. However, investing requires a long-term commitment, and it’s important to understand the risks involved. Investing can be done independently, through a financial advisor, or through automated investments such as Robo-advisors. Each option has its pros and cons. Some investment vehicles require much money to begin, while others may be less liquid and harder to sell. Regardless of the type of investment, individuals should always ensure that they have enough income to meet their daily living expenses and emergency savings. Many assets can be used to develop wealth, including real estate, private notes backed by real estate, and stocks. They typically offer high returns compared to other investments. However, these investments, such as CDs or bonds, are considered riskier than others.

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