What is a Financial Advisor?
A financial advisor is someone who gives financial advice to his clients. When determining an investment portfolio for a client, they must be able to take into account a variety of information, including economic trends, regulatory changes, and the client’s comfort with risky decisions. An important part of a financial advisor’s job is to make clients feel comfortable. They must establish trust with customers and respond well to their questions and concerns.
What does a Financial Advisor do?
Financial advisers assess people’s financial needs and help with investments (such as stocks and bonds), tax laws, and insurance decisions. They help clients plan short-term and long-term goals, such as education and retirement expenses. They recommend investments to match clients’ goals. They invest customer money based on customer decisions. Many also offer tax advice or sell insurance.
Personal financial advisers typically do the following tasks:
- Meet with clients in person to discuss their financial goals.
- Explain the types of financial services they provide.
- Educate clients and answer questions about investment options and potential risks.
- Recommend investments to clients or select investments on their behalf.
- Help clients plan for specific circumstances, such as education or retirement expenses.
- Monitor client accounts and determine if changes are needed to improve account performance or accommodate life changes, such as getting married or having children.
- Research investment opportunities.
Although most financial advisers offer advice on a wide range of topics, some specialize in areas such as retirement or risk management (assessing how willing the investor is to take risks and adjusting investments accordingly). After having invested funds for a client, they receive periodic reports of the investments. They monitor the client’s investments and usually meet with each client at least once a year to update them on potential investments and adjust the financial plan due to changing client circumstances or because investment options have changed.
Many spend a great deal of time marketing their services, meeting potential clients, giving seminars or through business and social media. Many financial advisers are licensed to directly buy and sell financial products, such as stocks, bonds, annuities, and insurance. Depending on the agreement they have with their clients, advisors may have clients’ permission to make decisions about buying and selling stocks and bonds.
Private bankers or wealth managers are personal financial advisers who work for people who have a lot of money to invest. These clients are similar to institutional investors (commonly companies or organizations), and they approach investing differently from the general public. Private bankers manage a collection of investments, called a portfolio, for these clients using the bank’s resources, including teams of financial analysts, accountants, and other professionals.
What is the workplace of a Financial Advisor like?
Financial advisers typically work in offices, and about a quarter of financial advisers are self-employed. Many also travel to attend conferences or teach finance classes in the evening to attract more clients. Most consultants work full time, with a large percentage working more than 50 hours a week. They often go to meetings in the evenings and on weekends to meet with existing clients or to try to bring in new ones.