A financial adviser or financial planner is an individual who offers financial advice to clients according to their current financial circumstances. They can work independently or for a company that hires them to offer this advice. In the United Kingdom, there are several regulatory bodies in place to protect client rights and ensure that the adviser provides honest advice. In most instances, financial advisers must undertake certain formal training and also be formally registered with a governing body to give professional advice. In most cases, they must meet strict ethical standards. However, in some industries, there are no regulatory requirements for financial advisers and they are able to engage in a wide range of practices.
In the United States, there are three regulatory bodies – the Financial Planning Association, the National Association of Personal Financial Advisors (NAPFA), and the Financial Industry Regulatory Authority (FIRRA). The Financial Planning Association is the professional body that regulates the professional nature of financial advisors and works to set down guidelines and to carry out research into the effectiveness of financial products. The National Association of Personal Financial Advisors, which is the governing body for NAPFA, establishes minimum standards of practice for advisers and also works to set rules about compensation, advertising and other issues. The Financial Industry Regulatory Authority regulates the print and broadcast industry and acts as a watchdog for the industry.
The main focus of financial advisors is to provide advice and in some cases, financial products such as pension plans and annuities are regulated by state law. Some states have additional regulation covering investment companies. There are professional groups like the TIAACSA, which represents the insurance industry, and the Financial Planning Association that provide information on taxation, retirement accounts, mutual funds, insurance related issues and tax planning. In general, financial advisors can help people make investments, provide advice on savings and investment, and can help people establish financial goals and objectives and plan for these objectives. Many financial advisors provide a wide range of services such as tax planning, estate planning and asset protection and financial consultation.
Financial advisors must maintain a high quality of education and expertise. Graduates with an MBA or equivalent are expected to be competent counselors with many years of experience. The skills that are required by financial advisors include financial planning, investment and asset protection strategies, financial analysis, risk management, investing in residential properties, and transactional work. These counselors need to understand the laws of the country in which they work, as well as understand the differences between proprietary and mutual funds. In order to be certified, financial professionals must pass the Certified Financial Planning Continuing Education (CFCE) examination.
In addition to providing financial advice, financial advisors also have a duty to act in the best interests of their clients, and can be called fiduciaries. A fiduciary is someone who gives informed consent, and has the responsibility to act in the best interest of the client. Commonly, fiduciaries are corporations or other licensed professionals. In a corporate setting, for example, a corporate attorney or accountant would be a fiduciary.
Financial planners also provide a wide range of investment products and services to individuals and families, including pensions, retirement plans, and insurance products. They can help individuals and families plan for the future and manage their finances through a series of investment products including stock options, bonds, and savings accounts. Most financial advisors offer a free initial consultation to discuss investment options and help individuals create a solid financial plan. Financial advisors help their clients achieve their financial goals by helping them build a comprehensive financial plan that allows them to meet their goals and dreams.