Financial advisor: Overview, Roles and Job Responsibilities

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If you are interested in finance, you can be a financial advisor. Or if you have no interest in it, you can hire one.

In the umbrella of the term Financial Advisor, there are various professions, but their basic

Who Are Financial Advisors?

A financial advisor is hired and paid by an individual or a corporation to give advice on their financial needs. These needs can be of different varieties such as budgeting, saving, tax management or reaching certain financial goals, any kind of investment, and so on.

Additionally, all of these can be both long-term and short-term.

Such an advisor would have to know your financial status thoroughly and with that knowledge give you advice on how to reach your goal more effectively. Further, they will guide you on how to save more while gaining more at the same time. With their help management of your finances in any investments or savings becomes much easier and more safe and secured. Notably, the risk of losing or being in debt becomes much less.

Roles

Firstly, the question of who they are. They are of many professions, they can be an investment manager or advisor, tax preparer, wealth manager, insurance agent, financial representative, or even an estate manager.

But clearly, their role is to give you advice on how to manage your finances in your endeavor while making sure you get the best profit possible.

To look at it more broadly, on an individual level one of their main role is to assist you in your investments. They will study your finances first, which may be your income, savings, or debts.

They will also assess how much of a risk you are willing to take on your investment. After all this is done, they advise you on what investment will be best for you and how much you could invest while expecting how much in return. They draw up a portfolio in your interest.

But it is not only in investment that their role is needed, rather they are needed in much more simple things such as creating a budget for a wedding, planning different kinds of insurance, or even retirement plans or it can be as simple as budgeting for savings and expenditure.

But when we look at a bigger scale, that is when the work is for an entity; for instance, a big company. In this regard, a financial advisor would assess any new development or projects the company is going to work on and invest in. After the assessment, they would come up with a portfolio of how much profit can be earned with how much investment, risk of loss, and the ideal places or projects they can invest in to earn more.

How Much do I pay to Hire a Financial Advisor?

As is with any other sector, how much an advisor costs differs in every circumstance. For

instance, the experience of the advisor is a great factor. Hiring a fresher will be much different from hiring a veteran in the field. Likewise, it also depends on what job you hire them for.

The first common way of charging is Asset Under Management(AUM). Under AUM the most common fee charge is 1%. In this case, they charge you by how much the assets they manage cost. In India, this charge may cost you as little as Rs.10,000 or as high as Rs.60,0000 per annum depending on the price of the asset the advisor manages for.

The second way of charging is a flat rate. In this type of charging, a price is agreed upon and paid hourly, monthly, or even annually. The last one will be reward-based, in such case the advisor charges you based on how much return you get on your investment.

While deciding on which way you want to pay and how much, you should also know how to differentiate between the two distinctions of advisors.

The Fiduciary Advisors

A fiduciary advisor gets paid in the form of a flat rate and cannot be paid via

commissions. This means they don’t get paid more or less depending on the

performance rather it is fixed. And thus, this makes sure the advisor avoids profiting off

the client’s assets or investments. Thus, they end up putting the client’s interest first and

would tell you your options at all times

The non-Fiduciary Advisors

A non-fiduciary advisor is someone who gets paid by commission from

certain companies when they sell their specific investment products. This suggests that despite

having other better options, since their product is also okay they are most likely to suggest their

product first. Thus, their interest is put over the clients.

How much do they earn?

As it is with cost, their earning also depends on a variety of things. Notably, a fresher earns less than a senior, their pay would depend on how long of an experience they have. Another factor will be what types of jobs or projects you manage and on what scale. Also, it depends on the place you work, different parts of the world have different rates of payment. In India, the average income of a financial advisor annually is 15 lakhs to 16 lakhs. But they also make an additional commission of about 10 lakh annually.

It is considered a very lucrative profession in terms of income but it is also a highly demanding job.

What are the conditions needed while choosing an advisor?

A financial advisor is someone who would take charge of how to use your money and assets, thus choosing them is a critical decision. So, think twice and ask again and again before hiring one.

Firstly, know exactly what you need them for, maybe for tax payment, savings, investment, or asset management. But whatever it may be match that with the profile of the advisor.

It is always wise to do your research well, ask around, and maybe go for someone who has already worked with someone you know. Or make sure to go through their resume carefully and even ask for a portfolio. Another safe way is to look at their experience and hire someone who has at least four to five years of experience.

One of the most important things is to ask how they get paid. That is either they are fiduciary or non-fiduciary and choose whichever one works best for you. Make sure to look at their qualifications, the courses they took, and the certifications they have. You can also check their professional credentials such as whether they are Certified Financial Planner which is a globally accepted standard.

How can you become one?

Like most jobs, you need a bachelor’s degree to pursue this profession. Although it is not

compulsory, having a degree in economics or finance would equip you with more knowledge than other subjects.

After that, you can go for an internship in any institution where you will learn more about the job and will be equipped with the certifications and qualifications you need to become a financial advisor. This is a job that can be done individually but starting with a company first is highly recommended.

Another way to build up your portfolio is by taking courses to equip yourself with all the needed skills. Salesforce courses are recommended as with them you can easily asses client’s profiles, have interactions that you can easily plan and maintain and lastly give them the investment plan they need. Salesforce is a Customer Relationship Management (CRM) platform that is ideal for a financial advisor whose job requires a lot of communication.

Henry Harvin Education

Henry Harvin is a highly credited institution with affiliation to many regarded institutions like Amazon, Microsoft, Skill India NSDC, etc. It is one of the best institutions with an 85% employment rate as a result of its fantastic placement drive in partnership with Freshworld, IIM Jobs, Naukri, etc.

Their classes are done online which is very interactive and further guided throughout by an instructor while also offering E-learning access. Gold membership is granted to anyone who has registered for any course. Each course has a guaranteed internship and job placement support.

Moreover, their course syllabus is very career-oriented making sure practical needs are taken into consideration.

The courses they offer on Salesforce at this time are:

Conclusion

To conclude a financial advisor is someone who advises your finance management, it is a

demanding job that pays fairly well. Furthermore, they are someone we need to make sure our money is managed well despite our poor knowledge of finance. But we need to be careful of who we hire and how we communicate with them as it is our own money and assets that they will be dealing with.

But may it be an individual or a company of any kind, one thing to be clearly known is that the advisors work for the client, not their employer. Because of this, the client’s interest should always be above their own. A good advisor’s priority should always be the client’s interest and betterment and never their own.

FAQ’s

Q.1 Are financial advisors needed?

Ans. They are needed if you are unsure of how to invest, spend, save, or budget. They will be a huge help as they advise you through each step of your investment.

Q.2 How does a financial advisor earn?

Ans. They charge their client a flat rate or they are paid by commission through investment products they sell for certain companies.

Q.3 How do financial advisors get clients?

Ans. If they work for an institution, the institution’s clients are their clients. If they work they should brand themselves independently, do content marketing, email marketing, and so on.

Q.4 What does a financial advisor do?

Ans. They advised on any financial issue from investment to budgeting, savings, asset management, retirement plans, tax preparation, and so on. Their job is to make sure their client earn more by spending less.

5. How much is the anticipated income of a financial advisor?

Ans. The amount of income depends on many factors such as experience, place of work, the nature of the work, and so on. Thus, it cannot be determined exactly.

Financial Advisor: Overview, Roles and Responsibilities.

Who Are Financial Advisors?

Roles