How does a financial adviser make money? How could it be free at the credit union?

There are three ways that I know of how Financial Planners make money. First, they charge an hourly rate. Second, they get "fees" from certain investments. Mutual Funds are notorious for this. They pay the advisor as much as 5% to "recommend" their funds. Third, the planner/financial institution collects a charge for each purchase or sale of an asset. Many banks offer Financial Planners for free (or at least appears to be free). Banks just consider this the cost of doing business. The bank will usually make the money up by you being a customer (loaning your money out to others) and from fees from investments. Banking is becoming so competitive that they pretty much have to offer an advisor for free to be as good as the next bank.

A financial advisor makes money by charging an hourly fee from clients to give advice on how to manage and invest their money. A credit union (or any bank for that matter) has a financial advisor available, many times, to advise their clients on ways to invest money at their financial institution. Don't forget, if you invest money with that financial institution, they are making money off of you by way of fees and interest rates. Therefore, it's really not "free." They just don't charge an hourly fee. If you don't already have an account there, they probably won't give you access to their "financial advisor." They may even want you to be an established customer with some kind of minimum balance to give you that advice. Of course, as mentioned above, they'll only give advice for financial investments available through their bank, not advise through some other avenues (such as the stock market). A financial advisor that you pay an hourly rate will give you more rounded advice as they're not getting any kind of "kickback" if you invest in any particular fund.

He/she could be making a commision on investments you 'buy.'