Roles of Financial Advisors in Achieving Your Financial Goals

The roles of financial advisors cannot be overstated, especially if you are planning on managing your money effectively to achieve financial success. Even if you are having some difficulties in your business, maybe as an individual, family, or a business owner, you can also benefit from the wealth of knowledge of a financial advisor.

Before we proceed, what even is a financial advisor?

A financial advisor is a professional who critically evaluates the financial needs of a client and suggests possible solutions based on their financial situations.

They work by assisting clients in making strategic financial decisions, as well as set clear short and long term plans to attain some financial goals. While the roles of financial advisors may look simple and clear-cut from the beginning, not just anybody can dabble into it. In fact, many countries require all their financial advisors to undergo some training and pass through some tests before they can hold a license to render such financial services.

Roles of Financial Advisors: What Exactly do They Offer Their Clients?

The truth is, while all financial advisors offer services that are very similar to each other, there might still be some differences at times. Since they are not all dealing with the same clients, the individual needs of each client will determine the kind of roles and services that a financial advisor will render.

However, the summary of the roles of financial advisors involves the assessment of the client’s financial status and coming up with advice and suggestions that will lead to improvement. Majorly, a financial advisor deals with either an individual or an enterprise. As we proceed, we will consider how financial advisors work with their clients to achieve their desired goals.

For an Individual

Financial advisors assist individuals in attaining financial buoyancy by reviewing their financial wants. Also, they help in making strategic decisions on investments (stocks and bonds), tax laws, and insurance. The services of financial advisors are useful in planning for near goals, such as education funding, or long-term goals like retirement.

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Furthermore, a hired financial advisor can offer tax advice and play a central role in the sales of insurance.

Listed below are the specific roles of financial advisors to an individual client:

  • They connect with an individual client and find out their financial goals.
  • They inform the client of available financial services that they provide.
  • They also educate the client by providing answers to investment choices and risks.
  • They suggest investments, as well as decide investments for the client, if necessary.
  • They assist in calculating expenses for particular purposes like retirement or education.
  • They also assess the bank accounts of clients and decide whether changes are necessary to enhance account activities in the event of a future marriage or family raising.
  • They periodically receive and review assessments of investment choices.

Note: financial advisors may be found useful in cases where there are needs to rebalance your portfolio. In this situation, they will help you balance the risks you take with your investments.

For Companies and Business Enterprises

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Beyond assisting individuals, financial advisors can also be able to proffer advice on corporate development projects.

Take, for example, when a company intends to enter into sales of a new commodity, a hired financial advisor may independently determine the profitability of such venture, and present to the company’s hierarchy to serve as an alternative to what they may have.

The future of a financial advisor is, however, under threat by the invention and upgrade of automated machines that serve their purposes.

Other Forms of Financial Advisors

The advent of technology has provided investors other forms of financial advisors that are different from the traditional ones they were used to.

Robo-advisors and online financial planning services are the results of this innovation borne due to the need for affordable yet reliable alternatives to financial advisors.

In fact, robo-advisors operate as applications that apply algorithms in the creation of investment portfolios to achieve a client’s financial goals.

These applications are programmed to accomplish many tasks within short periods of time and at affordable costs. The downside is that robo-advisors are not relatable. Hence, there may be a bridge in communications or relations between the client and the robo-advisor.

Peculiarities of robo-advisors:

  • They are more suitable for making investments and budgeting for financial goals such as retirement or education.
  • The minimum fee can be as low as 0.25% of your balance.

Online Financial Advisors

Online financial planning services usher similarly programmed investments as the robo-advisor. However, you will be provided online access to financial advisors who can entertain your questions and provide useful answers. Some platforms will even pair you with financial advisors who will assist you in managing your investments.

This choice is suitable when you want a traditional financial advisor, but can’t match their price demands. So it offers you something close. Wages on this platform are lesser than those for traditional financial advisors but higher than the payments for robo-advisors.

An example of a suitable online financial service that can manage your investments and help you attain set financial goals is Personal Capital.

While further improvements in services rendered by robo-advisors and online financial planners could pose a serious threat to the roles of financial advisors, we will always need them around.

Traditional or human financial advisors can be contracted when your financial case is complicated and specialized. If you need a human listening ear that you can relate to, it is also your best bet. You can find traditional advisors through recommendations from fellow investors or formally meet them at organized conferences, seminars, or online markets.

Having provided guidelines to various forms of financial advisors, their strengths and weaknesses, the decision on who to partner with is yours. In the end, try to woo affordable financial only. For some of them, their wages can be outrageous, but you can always find a fair one for your budget.

Do You Need A Financial Advisor?

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Under these situations, please assign yourself a financial advisor;

  • You find it difficult to create your financial goals.
  • Confused about where to strategically invest in, as well as when and the percentage to save.
  • You need an external view on your finances.
  • There is an urgent need for improvements in your finances.
  • You have trouble taking on certain complicated financial affairs like debt management, estate planning, tax.

Work-Place and Work-Life of a Financial Advisor

Financial advisors have offices, where they receive clients in and carry out some works, as their workplaces.

As a lifestyle, they are private workers. Some opt to lecture financial schools as a side-job too. Periodically, they go to meetings and attend conferences in order to woo more clients.

Financial advisors have a very critical role to play in the financial world by helping individuals and corporate bodies arrive at the financial goals they have set for themselves. And for this reason, the demand for their services in the foreseeable future will continue to soar.

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