A financial advisor or financial planner, also known as an investment manager, is an expert who recommends and offers financial services to people based on their personal financial situation. The term is sometimes used interchangeably with financial advisor. In some jurisdictions, financial planners must complete a specific set of education and hold a license to offer advice to consumers. In most countries, however, financial advisers are independent practitioners whose main function is to manage your investments and financial affairs.
Financial planning services include: investment advice, asset management, financial planning,
retirement planning, and business planning. Their primary goal is to educate consumers and give them the tools they need to make sound financial decisions.
An investment advisor typically provides investment advice to individual or institutional investors. Some advisors work with hedge funds, stock exchanges, financial institutions, and other entities to create diversified portfolios. Others focus on retirement, estate planning, and managing a limited portfolio.
An investment advisor is not regulated by state law. However, you can check the laws for your state or territory to determine whether your investment advisor has the appropriate licenses and registration requirements. The investment advisors that do operate in all states and territories should be registered or licensed with the State Board of Investments, the Office of the Superintendent of Financial Services in your state, or both. In most states, financial planners are required to hold a minimum of a bachelor’s degree in an economics, business, finance, accounting, taxation, or math program from an accredited university or college. Some states require a registered broker’s license, while others have no licensing requirement at all.
Most investment advisors can be found online, though a few firms are brick and mortar. When you contact the investment advisor that you plan to use, ask about their qualifications, experience, and licensing. If you can, try to interview the investment advisor to find out what type of advice he or she gives to clients. You should find that a qualified and experienced financial advisor will be willing to share his or her knowledge and will listen to your questions and concerns.
Another very important factor in finding the right advisor is experience. Investment advisers who have worked previously with various clients should be familiar with their clients’ needs, goals, preferences, and financial situations. They should be able to present their ideas and recommendations in a realistic manner, and give them a level of consideration. That an inexperienced person may lack. You should also want to choose an adviser with whom you feel comfortable working, because you will not have a great deal of control over how much work the financial planner does or what direction they take your investment portfolio in.
An experienced professional financial planner should be able to meet your needs
and provide guidance based upon these factors, as well as having enough financial knowledge to understand your own financial situation and current state of mind. If you hire an investment advisor that you don’t feel good about, you may end up frustrated and even resenting him or her, which could potentially impact your relationship with your advisor and the firm. If you hire an advisor that doesn’t take your input seriously, you could feel overwhelmed and lose faith in the investment adviser’s ability to advise and serve your best interest.
There are several organizations that provide assistance to individuals and companies in hiring an investment advisor. The Better Business Bureau provides free resources, including a free online service that allows you to view and evaluate investment advisor profiles and portfolios.
The National Association of Securities Dealers and Brokers (NASD) maintains a website that helps you to find an investment advisor in your area. NASD also publishes a magazine that provides valuable information about investment securities and investment issues.
- You should be able to discuss any problems or concerns you have with an investment advisor with ease.
- The advisor should be willing to respond promptly to any questions that you have.
- Should be willing to communicate well with you.
You also should have an advisor that is willing to listen to what you have to say. You should feel that the investment advisor can offer you accurate, timely advice.
Before you choose to hire an investment advisor, consider your options. There are many financial advisors that offer a wide range of services, some of which can include investment planning, investment management, financial planning, tax planning, estate planning, investment advice, brokerage services, investment banking, etc. Make sure you get a full understanding of all the services that are offered by the financial advisor before you make a final decision. When you feel confident that you have chosen an appropriate advisor for your situation, you can then begin using your services to make financial decisions for yourself.