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Home Finance Financial Advisor Qualification of Financial advisor
Financial Advisers, Planners and Counsellors play a major role in a company to decide about Investments which can give high returns. They also help individual investors. But before recruiting a financial adviser you should know about their role and recruit the correct person for the job.
If some mistake is made by not recruiting skilled financial advisers then it may lead to more losses than you can ever think of. This article gives clarity about all the information you need to know about financial advisers and their educational qualifications.
A financial adviser is a professional who works individually or for a financial firm to provide investment and financial advice. Advisors may receive a transaction commission or an advising fee for the service they provide.
Everyone in the financial counselling sector does not have the same level of knowledge, experience, or talent. Here we highlight several critical factors to look for to verify that your financial adviser is qualified for the job.
The best skills and abilities of a financial adviser can help us make more profits via proper investments.
The most important skills for a financial adviser are:
Thinking critically
Abilities in research
Communication abilities
Ability to solve problems
Leadership
When you recruit a financial adviser for your company you should check whether they are educationally qualified. You should check their schooling to a higher graduation level along with their work experience.
The minimum qualification for a financial adviser starts from passing his/her 10+2 higher secondary schooling examination. Followed by a bachelor’s degree related to finance and accounting field. Having a master’s degree is an added advantage.
When it comes to work experience they should know about investing, financial planning and risk management. You can surely recruit financial advisers with a professional Licence and mandatory certifications like CFP (Certified Financial Planner) as they are more credible and experts in this field.
Financial advisers can be experts and specialists in different areas of finance and investments. Different specialists provide some unique services which make their financial advice more profitable. The different financial specialists and their specific role is explained below.
Recruiting the correct financial adviser after knowing what is your goal can bring in more profits. All these financial specialists can be good financial advisers with good expertise and experience.
Different financial experts who can be good Financial Advisers:
Financial Analyst
Financial Planner
Accountant
Financial Examiner
Investment Banker
Economist
A financial analyst analyses financial data and utilize their conclusions to assist firms or clients to make business and investment choices.
Often, the study is intended to guide a company’s investment decisions. Financial analysts can effectively customize your investment portfolio by introducing you to various financial markets available.
Financial planners mostly provide long-term financial goals for companies and individuals. They are experts in the subjects of investing and finance. Financial planners examine the risk tolerance, financial goals, etc of their clients to come up with a profitable financial plan.
Most of you will be sure of who an accountant is as you might have already hired an accountant. Accountants mostly do audits or financial statement analyses and help you in carrying out all the procedures required for tax payments. They can work in a company and also provide services for individuals.
Financial examiners are regulators or moderators in the finance and investment field. Their main role is to check whether the banks, security companies, financial institutions, etc follow government laws and regulations. They are the ones who indirectly help you to keep your investments safe.
Investment bankers mostly work for companies, governments and corporates rather than individuals. Their main work is to raise cash and bring in investments for these organisations in large amounts.
Finances, investments and growth at a higher level are possible only vis proper research and solutions given by economists. Economists mostly work for Governments and Companies by considering the people, the global economy and various other factors to give investment and financial advice. They are the ones who help governments during a financial crisis.
All the above-mentioned professionals can work great as financial advisers.
Financial analysts, financial planners, and accountants can work as good financial advisers for individuals whereas financial examiners, investment bankers and economists provide great financial advice for helping governments and companies that involves large investments.
The characteristics and functions of financial advisers differ according to their clients. Advice and assistance given by Financial Advisers to individual clients and companies are listed below.
Financial advisers are a must need for a company to grow its business and profits.
The major advice given by financial advisers to companies are:
Assists in the company’s growth efforts by giving financial ideas.
Financial consulting servicing.
Analyse the worth, future and returns for a project or contract.
Investment ideas.
Advice for individual clients differs from those provided to companies. Individual clients mostly take financial advice on profitable investment avenues and their main is to increase their wealth.
The main advice given by financial advisers to individuals are:
A major piece of advice is giving legit strategies to increase their wealth.
Individuals prefer safer and more secure investment options even if they provide less Return on Investments (ROI). In those cases, financial advisers give options for reduced-risk investment portfolios.
Analysing clients’ risk tolerance.
Customized financial advice after an accurate analysis of a client.
Hiring a financial adviser is an important task that should be done with utter caution. Whether it is for a company or a government proper financial decisions can be an added advantage and bring in more profits. Financial advisers can even help a collapsing economy of a country to regain its financial stability. So, make sure to keep in mind the 7 points listed below while hiring a financial adviser.
7 things you should know before hiring your financial adviser/counsellor:
Understand the Different Kinds of Financial Advisors and select which type of financial adviser is suitable for you.
Look for Financial Advisors with Credible Credentials.
Understand how Financial Advisors are paid.
Use Search Engines to know more about financial advisers and their functions.
Before Hiring, interview them properly and know their standard from previous work experience and expertise.
Check for any Complaints about the adviser and verify their Credentials.
Learn for yourself on how to identify Frauds that can be committed by a financial adviser.
As we are moving into an era of Artificial Technology (AI), financial Advising can also be programmed to give appropriate results via computer software and mobile apps.
Financial Advisers can increase your profits with the right decisions, on the other hand, they can bring you more losses if they are not properly skilled. Check out the pros and cons of hiring a financial adviser in Table 1 so that you never go wrong due to any reason.
Table 1: Pros and cons of hiring a Financial adviser
 Advantages |
 Disadvantages |
|---|---|
|
A Financial Adviser can provide valuable advice on proper investments. They can increase your Return on Investments (ROI). A skilled financial adviser with an analytical and creative mind is the best choice to bring you more profit. Prefer experienced and licensed financial advisers with good track records. |
You should select the financial adviser properly or you might incur more losses. Financial advisers earn a good income, and due to this many Financial advisers can be frauds using your money. If you don’t know about investing they will use your money to profit for their own sake and will tell you that More Regulations are required to control fraud and select the right financial adviser. |
What are the minimum eligibilities to check before recruiting a Financial Advisor?Check for the minimum educational qualification up to the under graduation level. A financial adviser should also hold licenses such as FINRA license or other licences that are accepted in your country. Prior work experience as CFA, CFP, or ChFC is an added advantage.
What is the working atmosphere I should provide for a Financial Advisor?If you hire a financial advisor full-time, you need to provide them with an office space or work-from-home options. Mostly experienced financial advisers will have their own office and have many clients to whom they provide financial services.
What is the difference between a financial planner and a financial advisor? Who is apt for me?According to the need of your hour, you need to select whether you need a financial adviser or a financial planner. A financial adviser is a specialist who assists businesses and people in developing a plan to accomplish long-term financial objectives. A financial planner is a wide phrase for individuals who assist you in managing your money, which includes investments and other accounts. Sometimes you may need to recruit both a financial adviser and a planner as both play different roles.
How Can I Tell If My Financial Advisor Is Reliable?You might follow some steps to understand whether your financial adviser whom you plan to recruit is reliable or not:
You are the one hiring the financial advisers, so analyse and take time to think. Then decide whether to hire a financial adviser or not. If you already have one, check the work record to gain insights. This will show the reliability of your financial adviser.
Tell us about your experience with the Financial advisers in the comments sections below. Subscribe to our newsletter to update yourself with financial information. You can also learn easily about trading using tradingcritique.com.
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