What is a Financial Advisor?
‘What is a financial advisor?’ is the common question of those who have never relied on an expert to help them manage their finances and investments.
The answer is: A financial advisor is an expert licensed to help clients devise a plan that suits their financial circumstances and ensure that such a plan helps achieve clients’ financial goals. But before doing such things, effective financial advisors take the time to examine their clients’ entire financial picture—assets, liabilities and all. In this way, they can assess clients’ current financial situation and help them determine where they should be headed and how they can get there.
What is a Financial Advisor and How Can They Help People?
What does a financial advisor do? Here are some of services that a financial advisor usually provides:
A financial advisor creates a clear, thorough assessment of a client’s financial status, determining strengths and deficiencies. Based on his findings and evaluation, he makes recommendations, an action plan or blueprint for the attainment of specific financial objectives.
Resource allocation is one of the advisor’s many areas of expertise. When clients have conflicting priorities, for instance, saving for their children’s college education against setting up a retirement fund, they can count on a financial advisor to help them properly allocate their money so that all these needs are met.
Most advisers are tax experts and can therefore help clients invest their money in ways that will minimize their tax exposure and keep their funds intact. They are also adept at estate planning and can facilitate the transfer of clients’ assets to their loved ones when the time comes, making sure property values are maintained or protected.
In response to the question ‘What is a financial advisor?’, it is worth mentioning that an advisor also gives sound advice on specific areas such as: retirement accounts like 401(k)s and IRAs; medical, life, disability, and liability insurance; children’s education; personal and business taxes; and other financial matters such as the purchase of a second home or business, and early retirement.
Financial advisors may differ in terms of execution and the amount of financial advisor salary they make, but the services listed above should answer the question ‘What is a financial advisor?’