A person can work really hard to earn money, assets and have many goals and dreams that he or she wants to achieve using his/her earnings. But sometimes, they may fail to reach his goal due to lack of planning and management activities .This is where financial advisors come in to play.
Who are financial advisors?
Financial advisors are the professional workers or advisors who can help other people, in managing income, planning investment, tax savings and other wide range of services. There sole job is to assist with all the financial issues a person can have.
How do they work:
Financial advisors take the current financial situation of the client, deconstruct and analyze it to provide proper advice or service such that, the client will get least risk or zero risk factor. Hence, the professional advisors have to be an expertise in risk management.
Other than risk management, they should also be able to give some advice about insurance, tax planning, retirement plans, asset management and so on.
Some examples of financial advisors:
- Stock broker
- Credit card companies
- Investment
- Banks
4, why is it needed?
Individual needs: As stated earlier, each person has a goal. A dream of his own and in order to achieve that he or she might need to have proper amount of money. Financial advisory services are there to provide easy money management system so that one can reach his goal.
Business needs: Other than an individual person, financial advice is also needed by large companies.
The Financial advice is very important to a company’s sustainability, overall growth and investment as companies’ growth depends on its financial condition.
The financial services used by a company are called corporate financial services.
Government needs: government also needs financial advice at situations. It maybe for creating an annual budget or to launch a new policy, it is always good to have some advice over financial issues. They are also used while creating tax laws and bonds. The advisor working for government, must have a detailed knowledge about country’s or a state’s economy.
Advantages of using these services:
Expert advice: Instead of investing money in a place with no guarantee of where it will end up, it is better to go for an expert’s advice for doing so, since they have a broader knowledge about money management. Having a customized plan for saving money is definitely better than taking risk.
Time Saver: It is an added advantage that hiring a financial advisor is time saving because, they do all the portfolio management work. One has to only consult an advisor periodically.
Disadvantages of hiring a financial advisor:
Although it seems to be a good idea to hire a professional advisor, there are some cons that have to be taken care of.
Cost: Every good thing comes with a price. So does the advisors. There are a number of ways an advisor can charge a person based on the opted service. Some of the fees like annual fee maybe very high.
Professionalism:Not every financial adviser is good. Only few of them follow professionalism and help their clients.
Hence, choosing the best financial advisory firms can be a good idea. When it comes to choosing financial firms, you need to consider some important aspects such as reliability and affordability of the service. To get professional financial advice and promote your business, you need to choose reliable financial advisory firmsthat provide quality service at an affordable rate.
Can I trust financial managers:
Management of income and investment all seem exciting. But there are some things to be taken care of like fraudulent activities before opting for any advisory services. First of all, the advisor has to be a professional. That is he must be a certified advisor. Given are the certificates that can help differentiating between genuine and fraud financial advisory firms.
- CFP (certified financial planner): Proves that the planner or the advisor is genuine. It is granted by the CFP board.
- CFA (chartered financial analysts): prestigious certificate that is granted by CFA institute.
- PFS (personal financial specialist)
- AICPA (American Institute of Certified Public Accountants)
Hence, one has to look for the any mentioned certificates in order to avoid fraud. Make sure to verify the company valuation services before hiring the financial company. You can check online reviews, ratings and feedbacks that are available in the online forums. Review the feedback of other customers.
Robo-advisors:
The financial advisor who assist with plans and management online, without having too much of human coordination can follow certain algorithm and protocols in order to provide accurate advice. There are number of robo-advisors available online for a very less or affordable cost.