How to buy financial advice now

The financial advice business is changing dramatically in every aspect, from how advisers spend their time, to what they charge, to how they label and promote themselves.

The result? Further confusion for consumers who probably sought help to find clarity in the first place.

"Brokers" who used to pick stocks and sell mutual funds at firms like Morgan Stanley and Bank of America Merrill Lynch are now more likely now to call themselves "financial advisers" and manage portfolios for fees instead of (or in addition to) commissions.

Independents who used to offer comprehensive advice are now more likely to focus on investment management and call themselves "wealth managers."

Charles Schwab, the online brokerage that made its name catering to do-it-yourself investors, now is pushing its own stable of are "financial consultants" and preaching the value of face-to-face (or at least Skype-to-Skype) connections.

New to the scene are "robo-advisers" - algorithmically driven online money management firms that will automate your investment decisions.

Further complicating consumer choice is the fact that most firms have a variety of ways in which they offer financial advice to clients.

At Vanguard, for example, a firm which promotes simplicity in investing, there are nine different advice platforms. They vary, based on whether a client is investing through a retirement account or directly, how much advice a client needs or wants, and how much money the client has to invest.

How can someone seeking financial advice navigate their way through this complex field and make sure they get the right advice? Here are a few things you should know now:

NEEDS ASSESSMENT

Assess your own needs. The first step is to figure out what you want a financial professional to do for you. Do you want comprehensive investment management? A whole-life plan that includes everything from how to pay for college to tax reduction to retirement planning? Just a reality check on your retirement readiness?

PAY FOR WHAT YOU EAT

Once you know what you want, it's easier to find the right adviser. For a spot check or limited amount of planning, consider hiring a by-the-hour adviser - you can find one through the Garrett Planning Network (www.garrettplanningnetwork.com).

Want a comprehensive soup-to-nuts life financial plan? Look for a fee-only certified financial planner (CFP) through the CFP Board of Standards (www.cfp.net) or the National Association of Personal Financial Advisors (www.napfa.org).

LEARN THE LINGO

"Fee only" means that the adviser is not paid to sell products and, if that person is a certified financial planner, it also means she doesn't even own a small share in a financial company that does sell products.

"Fee-based" is a meaningless term of art, typically used by advisers who charge fees and reap commissions.

WATCH YOUR WALLET

There's a huge discrepancy in the amount of fees advisers charge.

At Vanguard, investors willing to stick with Vanguard funds can get basic fund choice advice for free and a comprehensive financial plan for 0.3 percent of the assets they invest with Vanguard.

Traditional brokerage firms will offer broader portfolios and go fee-only but at costs that can top 2 percent a year.

In the middle are most independent financial advisers, who tend to charge fees near 1 percent of assets, more for small accounts and less for bigger ones.

An extra percent or two, pulled from an account every year, can cost a long-term investor hundreds of thousands of dollars at the end of the day, so fees do matter.

CONSIDER GENERIC ADVICE

A lot of lip service is given to selling the idea that everyone needs personalized and customized financial advice.

That's true for people who have ultra-high net worth, with businesses, estates, tax issues and the like to manage. It's also true of people who have very special situations, such as handicapped children who will need lifelong care.

But it may not be true of the average Joe and Jane, who simply need tips on how to invest their 401(k)or IRA fund.

Companies like T. Rowe Price, Vanguard and Fidelity will give you basic fund guidance for free, or close to it.

REMEMBER THE ROBOTS

Companies like Wealthfront, Betterment and Hedgeable will invest your money for you in diversified portfolios regularly rebalanced and managed, if you need that, to minimize taxes.

They will charge pennies on the dollar of what a face-to-face individualized money manager will charge, and in some cases offer that for free.

They offer a reasonable solution for investors who know how much they have to invest, don't need hand-holding, and are comfortable turning their finances over to an algorithm and sticking with passive index-linnked investing.

Here's encouragement: Over long swaths of time, those passively-managed portfolios tend to beat the active investment managers.

(Linda Stern is a Reuters columnist. The opinions expressed are her own. The Stern Advice column appears weekly, and at additional times as warranted. Read more of her work atblogs.reuters.com/linda-stern)

(Editing by Bernadette Baum)