A financial advisor or financial adviser is someone who gives professional financial advice to customers according to their individual financial circumstances. In most countries, financial advisers must hold certain qualifications and be registered with a regulatory body to give advice. In the United Kingdom, anyone can give advice to customers as long as they do not receive the services for profit and must not recommend a product or a service that is contrary to public policy. In order to become a Financial Advisor, a person needs to be registered with the Financial Services Authority.
In the United Kingdom, there are a number of professional bodies that regulate the activity of financial advisors. One of these is the Financial Ombudsman Service. This body provides help to people who have been the victim of financial scams. Complaints about financial advisors can be made to this ombudsman through email, phone or in writing.
In the United States, professional groups have formed the National Association of Security Dealers (NASD) to pool together the interests of investors. They provide educational and networking opportunities to develop a more informed approach to investment. The main objective of NASD is to protect the American investor from fraud and asset scams. The primary functions of NASD are to educate the public about savings and investment, including mutual funds, bonds, and stock markets. Financial advisors can also be identified as Broker dealers, Wealth Advisors, Financial Advisors, and Public Financial Advisors.
Some of the other types of financial advisors are those who offer a fee-based financial advisor service. The most common type of fee-based financial advisor service is represented by the discount broker. Other types of fee-based financial advisors include full-service brokerage firms and self-service advisors. Full-service brokerages companies include banks, brokerage houses, and investment banks such as Merrill Lynch, Goldman Sachs, Santander Associates, and Trustee Company. Self-service advisors include individual planners, insurance sales representatives, and estate planners.
All full-service and self-service advisors should meet one or more of the following suitability standard criteria. All applicants for financial advisors must meet the following suitability standard criteria. Applicants must have an impressive level of education and experience as a financial advisor. All applicants must be members of the National Association of Securities Dealers (NASD).
The United States Department of Justice has defined the suitability standard to be a well-established guideline that guides a qualified professional with a significant amount of professional experience with money management issues to determine whether they are fit to offer protection under applicable law. This guideline requires that all individuals providing professional financial advice meet three critical qualifications. Individuals must be registered representatives of an individual firm and they must be registered representatives of a firm that meets the full accredited association. Finally, individuals must pass the test of the National Association of Security Dealers and the Financial Planning Referral Bureau. These measures were adopted to assure that the financial advisors who are licensed and follow the rules and guidelines of the NAR provide sound professional advice and assistance to their clients and aid in their investment decisions.