Financial Advisor
What Is a Financial Advisor?
A financial advisor is someone who gives financial advice to their 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 making clients feel comfortable. They must establish trust with clients and respond well to their questions and concerns.
What Does a Financial Advisor Do?
Financial advisors assess people's financial needs and help with investments (such as stocks and bonds), tax laws, and insurance decisions. They help clients plan for short- and long-term goals, such as education expenses and retirement. They recommend investments to match clients' objectives. They invest clients' money based on the clients' decisions. Many also offer tax advice or sell insurance.
Personal financial advisors usually perform 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 clients' 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 advisors 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 on 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 the client's changing circumstances or because investment options have changed.
Many spend a large amount of time marketing their services, and meet with potential clients, giving seminars or through business and social networks. Many financial advisors 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 their clients' permission to make decisions about buying and selling stocks and bonds.
Private bankers or wealth managers are personal financial advisors who work for people who have a lot of money to invest. These clients are similar to institutional investors (commonly companies or organizations), and 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 a Financial Advisor's workplace like?
Financial advisors usually work in offices, and about a quarter of financial advisors are self-employed. Many also travel to attend conferences or teach finance classes at night to attract more clients. Most advisors work full-time, and a large percentage work 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.
