A financial consultant or financial adviser is someone who gives professional financial advice to potential customers based on their individual financial circumstances. In the United States, the Securities and Exchange Commission regulates the financial advisers. In most states, financial advisers must complete certain training and obtain formal certification and registration with a state regulatory agency to give professional financial advice to customers. An adviser may offer a variety of financial products such as investment products, bonds, stock funds, derivatives, insurance products, and mortgage loans. They can also help individuals plan for retirement, create a solid estate planning strategy, and determine which retirement strategies are best for them.
Financial Advisors receive a wide range of compensation, which includes fees for their services from the clients. Some financial advisors receive commissions from the various securities and investment firms that they recommend to their clients, while others receive no compensation from any securities or investment firms. Most financial advisors work with independent firms or work for an insurance agency or other licensed professional.
In addition to receiving fees for their services, financial advisors may also receive bonuses, stock options, holiday bonuses, annual performance bonuses, and other compensation for their services from the clients. Brokers receive bonuses and incentives for clients that purchase certain types of securities from the brokerage firm. Some financial advisors may receive commissions on the sale of securities to their clients. When purchasing retirement plans through a brokerage firm, the planners receive a share of the proceeds. Other financial advisors may work solely for clients and provide investment advice.
There are many different aspects to becoming a financial advisor. Most financial advisors begin by obtaining either a bachelor’s degree or a master’s degree in business, finance, accounting, or any other field that allows them to have a successful career in the investment management industry. Many financial advisors start out by working in a large bank or other financial institution. Others become employed by brokerage houses and act as independent consultants. There are also many different specialties that financial advisors can focus on such as tax planning, estate planning, real estate management, and investment management among many others.
One of the most common licenses a financial advisor holds is a Certified Public Accountant (CPA). The CPA exam was created by the US Congress in 1978 as part of the Balanced Act. This certification program requires passing the exam two years prior to being certified. Each state has their own requirements in terms of the number of hours it takes to pass the exam and the number of times the applicant can take the exam. Candidates wishing to take the exam should check each state’s requirements in order to determine if they meet the requirements for licensing as a CPA.
Because financial advisors play such an important role with their clients, their licensing process is extremely strict. They are required to pass an exhaustive written examination, provide background information and experience with the type of issue being reviewed, and be backed by a qualified legal team. In addition to the written exam, potential candidates must pass a battery of psychological tests and a polygraph test. Candidates who successfully passed the psychological test and the polygraph exam are then admitted to the practice. Once they have met all of these requirements, they are given a license to practice and can work directly with their clients and provide any advice they feel is necessary.