A financial consultant or financial advisor is an expert who offers financial advisory services to customers according to their financial capacity. In most countries, financial consultants need to complete certain training and be accredited by a regulatory body to give advice on finance and other financial matters. The basic function of a financial advisor is to provide guidance on investment strategies that meet the investor’s needs without requiring excessive risk. They help provide advice on how money can be made available for investing to families, students and the government through savings or investment.
In the United Kingdom, financial advisors are required to register with the Financial Services Authority (FSA). In general, they have to hold at least a high educational level, master’s degree or doctorate degree in finance or any other relevant field. Some financial advisors work as brokers or agents, helping clients save and invest on behalf of the customer. Others work independently providing a range of financial products and services. The FSA regulates the activities of financial advisors to ensure the provision of sound advice and consistent consumer protection.
When working with a financial advisor, it is important to discuss goals and objectives. Discuss what you want to achieve in your future finances and ask for their opinion and advice on how best to reach these goals. It is also important to discuss your personal goals, such as whether your aim is to buy a house, pay off a debt, retire at age 65 or some other goal. Discuss the types of investments you would like to make, what type of returns you expect and whether your goals are challenging or not. Financial advisors may suggest one investment strategy or several, such as stocks, bonds, mutual funds, options, real estate and so on. If you have a long-term plan, discuss the details of this plan with your advisor and come up with a realistic budget that will help achieve your long-term goals.
Most financial advisors follow the Fiduciary Standard. This is the standard that all UK financial advisors must follow if they want to be allowed to recommend financial products to consumers. The Fiduciary Standard stipulates that an advisor must be either a registered investment advisor (RIA) or a certified financial planner (CFP). Certified Financial Planners meet the higher standards of the Fiduciary Standard. They must undergo further training after attending and passing an accredited education course.
Apart from the types of advice and investment management services, the role of a financial advisor also includes taxation planning. A good financial advisor provides tax advice and general tax planning for clients. They also provide accounting and insurance services and help draft tax plans and provide state-specific tax planning. Certified Financial Advisors also help estate planning, retirement planning, and asset protection for their clients.
Financial Advisors also work with estate planning for individuals. A financial advisor helps them to establish a retirement account, take out insurance policies, set up pensions, and manage other personal assets. They also handle estate planning and retirement payouts, help individuals transfer assets to named beneficiaries, and manage estate taxes. With years of experience and thorough knowledge of financial markets, a financial advisor can help people manage their money, make investments, and protect their wealth.