Is A Financial Planner Right For You?
Personal financial advisors, also called financial planners or financial consultants, use their knowledge of investments, tax laws, and insurance to recommend financial options to individuals in accordance with their short-term and long-term goals. Some of the issues that planners address are retirement and estate planning, funding for college, and general investment options. While most planners offer advice on a wide range of topics, some specialize in areas such as retirement and estate planning or risk management.
An advisor’s work begins with a consultation with the client, from whom the advisor obtains information on the client’s finances and financial goals. The advisor then develops a comprehensive financial plan that identifies problem areas, makes recommendations for improvement, and selects appropriate investments compatible with the client’s goals, attitude toward risk, and expectation or need for a return on the investment. Sometimes this plan is written, but, more often, it is in the form of verbal advice. Financial advisors usually meet with established clients at least once a year to update them on potential investments and to determine whether the clients have been through any life changes—such as marriage, disability, or retirement—that might affect their financial goals. Financial advisors also answer questions from clients regarding changes in benefit plans or the consequences of a change in their job or career.
Some advisors buy and sell financial products, such as mutual funds or insurance, or refer clients to other companies for products and services—for example, the preparation of taxes or wills. A number of advisors take on the responsibility of managing the clients’ investments for them.Finding clients and building a customer base is one of the most important parts of a financial advisor’s job. Referrals from satisfied clients are an important source of new business. Many advisors also contact potential clients by giving seminars or lectures or meet clients through business and social contacts.
Approximately 38 percent of personal financial advisors are self-employed, operating small investment advisory firms, usually in urban areas. About 31 percent of personal financial advisors are employed by securities and commodity brokers, exchanges, and investment services firms. Another 14 percent are employed by depository and nondepository institutions, including banks, savings institutions, and credit unions. A small number work for insurance carriers and insurance agents, brokers, and services. |
Funding Retirement 
Did You Know?