A financial advisor or financial adviser is an individual who offers financial advice to customers according to their financial circumstances. In the United Kingdom, advisers are required to complete a two-year course. In most other countries, financial advisers must also complete certain training and obtain a registered seal with a regulating body. These professionals use financial tools, such as the Heston Law calculator, to help people plan for their future. They can also help those who are starting out to get started with their own business. There are different types of financial advisers and the different ones have different areas of specialization.
Some financial advisors offer insurance and retirement plans; others sell mutual funds and some sell options, stock indexes, commodities, and bond funds. Most advisers only work with people who already have a retirement plan or a pension. There are also independent planners who are paid on a performance-based fee and provide independent advice to their clients. An independent financial advisor can be a pension or insurance planner, a self-employed consultant, and a member of a law firm.
There are also differences between financial advisors who provide comprehensive financial planning services and those who offer specialized advisory services. Comprehensive financial advisors generally handle everything that encompasses retirement plans, wealth management, and insurance and investment management. Specialized financial advisors specialize in one or two areas.
An accredited investor is a person who completes a program that allows him or her to become certified in investment management. He or she is expected to be able to understand charts, graphs, and data and to interpret the same so that he or she can advise people on investments that will yield them a good return. However, not all chartered financial advisors are independent because many certified financial planners work for insurance companies, mutual fund groups, and insurance companies themselves. Because the work that they do involves advising individuals, some of them are actually stockbrokers.
In addition to the basic educational requirements, prospective financial advisors should also have solid credentials. Many state boards require financial advisors to take and pass examinations. An accredited investor also needs to complete at least eight hours of continuing education every year. Most state boards also require that he or she pass a test that proves he or she understands the subject matter.
A good way for people to find out if financial advisors are the right person for them is to contact their state board. Many advisors will be licensed to practice in their particular states. People should also inquire with their employers, friends, and relatives as to which professional they might hire for advising their assets. A good advisor, although expensive, can be worth the money spent because he or she can help people make better financial decisions and increase their wealth.