A financial consultant or financial advisor is an independent professional that offers financial advice to clients according to their individual financial situation. The vast majority of financial advisors are not registered brokers and have to get their license from the FSA (Financial Services Authority). In most countries, financial advisers must complete certain professional training and pass an exam in order to offer advice to individual consumers. This information is listed on the FSA website.
There are different types of financial advisors. One is the wealth management advisor, which is employed by large commercial banks and insurance companies to help affluent individuals plan for their estates. These advisors often work with multi-million pound investments and are expected to be well versed in estate planning and asset protection. Another type is the investment advisor, which is employed by small firms, boutique financial advisors and individuals. The duties of an investment management advisor usually include investment management research, pension and savings plans, and investment strategy implementation. Many financial advisors also offer financial planning software that allows the investor to track money management trends and performance.
Many independent financial advisors offer other services as well. Some offer financial planning education and mentoring. They can teach individual investors how to save for retirement, build retirement funds, and plan for unexpected events such as job loss or illness. Other services offered by advisors include estate planning, probate planning, charitable donations and asset protection. While these services do not fall under the purview of investment management, the two are usually intertwined.
Fee-only advisors provide personal financial advising through the direct service of a broker. These advisors are not regulated by government agencies and are not required to obtain licensing. Most fee-only financial advisors charge a percentage of the assets under their control. This means that if you have $10 million worth of stock and hire an advisor, he will manage your account using any method he feels works best – even if it means taking a financial loss on the deal.
A number of financial advisors offer a wide range of financial products including CDs, mutual funds, certificates of deposit, money market funds, and several others. Some offer advice about insurance products, while others provide information about how to invest in real estate. When you hire a planner, you will probably have an account already open in a savings or checking account, which will make things easier for him in terms of accessing your information and creating a portfolio for you. However, you still need to have a working relationship with the planner, especially if you want to be sure that you will be able to access your funds when you need them most.
As you can see, there is a difference between investment management and financial advisors. You should be aware of this difference when it comes to deciding which type of financial advisor to use. Do some research, talk to people who have used financial advisors before, and consider your goals and lifestyle when choosing a financial advisor to help create your investment plan. Your future depends on it!