A largely client facing position, providing financial advice or guidance to customers/clients for compensation.
What Financial Advisors Do
Financial Advisory professionals are qualified financial experts who work with clients or customers to advise them on investments, taxation, insurance or other financial areas.
‘Financial advisor’ is a broad and generic term that can fall into many categories. Financial advisors can work with private clients and individuals on a smaller scale, or with large financial advisory firms advising businesses on their financial needs.
Individuals who seek out financial advisors usually have liquid assets that can be invested. The financial advisor’s role is to asses the needs, risk tolerances and timeline for investing and come up with a strategy that is copasetic with all of those requirements. For larger firms, businesses also need advice on their own dealings, be it taxation strategies, growth strategies, restructuring or capital raisings.
Financial services firms work on these projects with large businesses to achieve similar goals to individual investors, but on a much larger scale. In order to give financial advice, advisors must adhere to strict industry rules have obtained professional qualifications.
Certified Financial Planners work with individual clients, advising them on savings for retirement or specific goals, investing, budgeting and many more topics that can affect an individual financial future. The main task a financial planner must handle is determining the timeline for investing and the ability/willingness of the client to accept risk.
Financial planners the come up with strategies that match the time and risk profile of the client and make recommendations. They then implement the strategies on behalf of the clients. Financial planners work at the discretion of the clients and earn their keep charging fees and sometimes taking a commission.
Financial consultants are internally focused individuals who provide financial advice to corporations and money managers. While financial analysts deal with the broader markets various at large economic trends, a financial consultant will help businesses increase value, decrease costs and improve capital efficiency.
A financial consultant might help with a mergers and acquisitions deal or come up with the compensation strategy for company executives. Consultants can be in house, working for the particular firm full time, or work for a financial services firm and have many different clients.
An investment adviser gives advice to clients about investing in securities such as stocks, bonds or mutual funds, and other assets such as property.
Most of their work is client-facing, and they earn their keep by giving personalised advice for investment portfolio building, based on risk and client factors.
A portfolio manager is responsible for the investing strategy of a particular portfolio or groups of portfolios. These jobs are usually found at funds who invest on other people’s behalf. Portfolio managers will also implement investment strategies and manage the day-to-day portfolio trading activities of traders working under them.
The portfolio manager is one of the main factors to consider when looking at investing in a fund and is therefore a very important role. Portfolio management can be active, where they pursue strategies that involve continuous trading, or passive, where they implement a strategy and let it play out with minimal adjustments. Historical performance records indicate that only a minority of active fund managers consistently beat the market.
Private banking deals with banking services and personalized financial advice which is usually offered to high net worth individuals. These particular clients have accrued significant wealth and thus require and have access to a larger variety of conventional and alternative investments. Private bankers aim to match such individuals with the most appropriate options.
Working as a private banker, day to day duties include protecting and growing assets as they stand in the present, providing specialized financing solutions, planning retirement and passing wealth on to future generations.
Stockbrokers executes buy and sell orders on behalf of clients for mainly stocks but also other securities in a listed market or over the counter. They usually charge a fee or take a commission. Stockbrokers are usually linked with a brokerage firm and handle transactions for both retail and institutional customers.
Discretionary brokers manage all investments and make decisions on clients’ behalf and buy and sell shares on the stock market, executive brokers engage in investment activities only after a clear request from clients while advisory brokers advise on appropriate investments, without directly making the decisions.