Should You Consider a Financial Advisor

What are Financial Advisors?

Financial advisors are specialists in handling the money of an individual. Whether you talk about formulating an emergency fund plan or creating complex investment portfolios, they do it all. They also perform as a teacher by training their customers about the financial products available in the market. Moreover, financial advisors impose a small fee for their assistance. A financial advisor can help those who do not have market experience or enough time to maintain their investments.

Who is a Financial Advisor?

A financial advisor performs multiple roles, from shaping and constructing a portfolio to maintaining it continuously. Financial advisors also apply their market expertise to craft a proper portfolio that meets their client’s specifications and goals. They also retain a tab on clients’ finances to revisit the portfolio regularly.

Financial advisors teach their clients about the business and let them know what is best for them. Firstly, they manage to talk about smaller topics like savings and funds. Later on, they move to complicated issues like insurance, taxes, and investments.

Financial advisors also understand their client’s fiscal health, conditions, and financial goals before advising them on investments. They usually take the help of financial surveys. This is to understand the assets, debts, financial stability, incomes, and expenses of their clients. Therefore, using the questionnaire, they conclude the risk-taking capacity of a client. Based on this, financial advisors guide their consumers.

What do Financial Advisors Provide?

A financial advisor is very common to an investment advisor, financial administrator, investment manager, or investment counselor. A financial advisor examines a client’s current financial situation and helps the client set feasible, attainable financial goals. He or she can inscribe a broad array of issues competently. They also offer investment recommendations, give objective advice, and help clients consider life decisions’ economic outcomes, while staying organized.

Financial advisors often have expertise in tax devising, asset allocation, risk supervision, retirement plan, and estate outlining to help customers at all stages of life and in various situations. In some cases, a client will let their business advisor act as a fiduciary, indicating that the client provides the financial advisor permission to make decisions on the client’s behalf without asking the client for consent beforehand. Financial advisors usually either cost by the hour or charge the client a portion of the assets under their control.

Types of Financial Advisors

There are several distinct financial experts you’ll find under the financial advisor sunshade. These include:

  • Registered Investment Advisor (RIA): 

RIAs are filed with a state or federal firm to give investment guidance. They can assist you in buying and selling bonds and other investment methods. RIAs are restricted by fiduciary responsibility.

  • Financial planner: 

Financial planners are a more customary advisor who assists with creating a holistic strategy for your investments. They can help with areas like retirement devising, education funding, and budgeting.

  • Wealth manager: 

Wealth supervisors tend to be a friend for someone with more assets, especially high-net-worth individuals. These experts help with fields like risk management, capital gains, and estate devising.

When Should A Person Hire a Financial Advisor?

In an ideal world, everyone would have financial advisors with whom we could discuss once a month before making a significant investment or financing decision.

Persuasively, however, financial advisors are valuable. And that’s not significant because they don’t want to serve people who can’t afford them, but because advisors have to impose a specific amount to make a living doing what they do. As a result, the choice to hire a financial advisor needs a careful cost and benefits review.

The Bottom Line

A financial advisor is a specialist who helps individuals and businesses manage their money and other financial matters. Financial advisors may present financial planning, asset supervision, or some unification of the two. Two types of fee formations exist: fee-based and fee-only. Because financial advisor is usually a catchall term rather than a definite one, make sure you know what help a financial advisor provides and does not provide before you sign up to run with one.

The financial industry has come such a long way over the last 20 years. Most individuals are perfectly capable of handling their own investments. Today, nearly all investment banks offer online platforms to buy and sell nearly every financial asset, the most popular would be stocks, options, and bonds. There are also several research centers and trading coaches to help people get to where they need to be for a fraction of the cost of a financial advisor.

To receive your free comprehensive option strategy course so you can learn to make the best decisions with your savings, sign up as a free Option Strategies Insider member today and take advantage of all our training resources today.


Chris Douthit
Chris Douthit

Chris Douthit, MBA, CSPO, is a former professional trader for Goldman Sachs and the founder of OptionStrategiesInsider.com. His work, market predictions, and options strategies approach has been featured on NASDAQ, Seeking Alpha, Marketplace, and Hackernoon.