Importance of a financial advisor
A financial advisor can help you to achieve your short term and long term financial goals. If you are not on track to achieving your goals, an advisor can help you implement the right strategies or set more realistic goals Financial advice can be useful at the importance stages in your life, like when you’re starting a family, being retrenched, planning for retirement or managing an inheritance.
Who is a ﬁnancial advisor?
A ﬁnancial advisor is the person who provides guidance on where, when, and how to invest. The advice they provide could be for a wholesome ﬁnancial plan or individual investments made towards a larger ﬁnancial plan. Financial advisors offer advice on everything from selecting a financial instrument to deciding how much to invest and how frequently to review it, as well as taking corrective action if necessary.
Financial advisors provides wide range of services like advice on financial planning, investment management, estate planning, marketing, coverage of insurance, retirement budgeting, tax planning, and banking. Selecting an effective financial advisor is utmost important. Do your research and spend time to evaluate potential financial advisors. It is acceptable to put a big effort in this process. So, conduct an examination among the candidates and select the most qualified one.
Responsibilities of a financial advisor
Advisor roles can vary depending on several factors, including the type of financial advisor and the client’s needs. Typical responsibilities of advisors are listed as follows:
- Initially, financial advisors have to clearly declare which type of financial advice will be provided. For example, independent advice is unbiased and unrestricted, but restricted advice is limited. Therefore, a restricted advisor should declare the nature of the restriction. If it is unclear, more questions can be raised.
- Meetings with clients to discuss their financial resources, allocations, needs, income, expenses, and planned goals.
- Providing appropriate plans by analyzing the background, financial data, and capabilities of the client.
- Identifying new opportunities.
- Providing strategic plan to coordinate personal and business finances.
- Guiding clients to implement the financial plans.
- Reviewing the implemented plans’ performance and updating the implemented plans on a regular basis on a regular basis in different stages of clients’ growth.
- Regular monitoring of the financial portfolio.
- Keep tracking of the client’s activities and confirm they are following the right path.
- Advisors should provide responses to the clients’ doubts and inquiries.
- If any problems are encountered by the management advisors, they sort out the root causes and solve them.
- Build a financial risk assessment and evaluate the potential effect of the risk. After the completion of the risk analysis model, the adviser will analyze the results and provide an appropriate solution that to be implemented.
- Follow the rules and regulations published by relevant regulatory bodies.
In most countries advisors are employed to save time and reduce stress. They will aid in the achievement of the financial and personnel goals. They take the responsibility for the provided decision. As a result, clients need not be concerned about the decision. It is a long-term process. They need to study and analyze more areas to align the right path. One common misconception is that hiring an advisor costs money and that products are expensive. But this led to an increase in the net returns, cost savings, and also guided the path to profitability.
Qualification of a Financial Advisor
Several measures can be compared to identify a qualified and competent advisor. Generally, advisors need to meet standard academic qualifications, experiences and certification recommended by the government.
- Academic Qualification:
The basic educational qualification of the advisor is a bachelor’s degree. They were approved for a degree or higher in accountancy, economics, law, financial management, and business management. A Master’s degree will be more effective.
At the initial stages, advisors are working and being supervised by a more experienced financial advisor. Clients are more concerned about the experience when hiring an adviser. Extensive experience provides excellent financial advice.
Certification is considered the license of the advisor. Certified Financial Planner (CFP) is the highest level of certificate in financial planning, which is obtained after 3 years of working experience.
In Australia courses are approved by FASEA (Financial Adviser Standards and Ethics Authority) and accredited by CPA (Certified Practicing Accountant) Australia, CAANZ (Chartered Accountants Australia, New Zealand) and (FPEC) Financial Planning Education Council).
- Skills and competence:
Highly expected skills are: analysis, research, analytical thinking, understanding of complex issues and sorting them out easily, research skills, clear strategy, wealth management knowledge, teamwork, time management, Computer and IT knowledge, communication, negotiation, and customer service skills.
Hiring an excellent financial advisor will helps to improve your financial situation during a difficult time and provide convenience in achieving your goals. It is necessary to put an effort while choosing a professional financial advisors. While seeking an advisor, please consider credentials, experience, skills, fiduciary, and payments. Search for clarity until you get a clear idea and full satisfaction. Always ensure that the advice you receive from an advisor is always in your best interest. Ultimately, financial advisors maximize the success of a business and also make it grow and flourish.