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Financial Advisor: What They Do and When You Need One

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Who is a Financial Advisor?

A financial advisor is a professional who provides financial guidance and advice to individuals and businesses.

They help clients make informed decisions about their money by providing expertise in areas such as investment planning, retirement planning, estate planning, tax planning, risk management, and budgeting.

Financial advisors can also help clients understand their financial goals, create and implement a financial plan, and track their progress over time.

Some work for financial institutions such as banks, brokerage firms, or insurance companies, while others work as independent consultants.

Financial Advisor Job Description

The qualifications and responsibilities of financial advisors vary depending on their specific roles. However, their responsibilities typically include:

  1. Assessing clients’ financial needs, goals, and risk tolerance: The advisor will have a comprehensive conversation with the client to understand their current financial situation, future financial goals, and risk tolerance.
  2. Developing a financial plan: Based on the information gathered during the initial meeting, the financial advisor will develop a customized financial plan that outlines the steps the client needs to take to achieve their financial goals.
  3. Providing investment advice: Financial advisors may recommend specific investments, such as stocks, bonds, mutual funds, or exchange-traded funds, to help clients grow their wealth.
  4. Monitoring the financial plan and investments: The advisor will periodically review the client’s financial plan and investments to ensure they are on track.
  5. Staying up-to-date with market trends: The advisors must stay informed of changes in the financial industry, such as market trends, new investment products, and changes in tax laws.
  6. Providing guidance: Financial advisors will be available to answer their client’s questions and provide support and guidance.

💡 The specific responsibilities of a financial advisor may vary depending on their area of expertise and the services they provide. However, the general goal is to help clients make informed decisions about their money.

What are the Skills Required to Become a Financial Advisor?

To be a successful financial advisor, you typically need the following skills:

  1. Strong communication skills
  2. Analytical skills
  3. Organizational skills
  4. Problem-solving skills
  5. Sales skills
  6. Technical skills
  7. Ethics.

💡 In addition to these soft skills, they also need to have a strong educational background in finance, economics, or a related field, and obtain certifications and licenses.

When do you need to get a Financial Advisor?

Here are some scenarios where you may consider working with a financial advisor:

1. Starting a new job

If you have recently started a new job and need help creating a budget, building an emergency fund, or planning for retirement, a financial advisor can help.

Cowrywise can also help you. Get help from our financial education resources on

2. Getting married or starting a family

When starting a family, you may need to consider life insurance, estate planning, and educational savings for the kids. A financial advisor can help you make informed decisions about these important financial decisions.

3. Approaching retirement

As you approach retirement, you may need to make important decisions about how to manage your retirement savings and how to plan for long-term care. A financial advisor can help you create a retirement plan that meets your needs.

4. Accessing sudden wealth

If you suddenly have access to a large sum of money, such as an inheritance or lottery winnings, a financial advisor can help you make informed decisions about how to manage and invest your newfound wealth.

Related: How To Manage Sudden Wealth

5. Investing

If you are new to investing or are considering making significant investments in the stock market, for example, a financial advisor can help you understand the risks and rewards of different investment options and help you create a diversified investment portfolio.

6. Major life changes

Major life changes, such as divorce, the death of a spouse, or a disability, can have a significant impact on your finances. A financial advisor can help you navigate these changes and create a plan to manage your finances going forward.

7. Complex financial situation

If you own multiple properties or businesses or have a high net worth, a financial advisor can help you manage your finances and reduce the risk of making mistakes.

8. Lack of financial knowledge

If you have limited knowledge about personal finance, investing, or retirement planning, they can help you understand the basics and provide guidance to help you make informed decisions.

9. Need for objective advice

A financial advisor can provide an objective perspective on your finances and help you avoid making decisions based on emotions.

10. Need for accountability

A financial advisor can hold you accountable to your financial goals and help you stay on track, even when it’s difficult. By working with one, you can increase your chances of achieving your financial goals and becoming financially secure.

💡 In general, it’s a good idea to consider working with a financial advisor if you need help managing your finances, creating a financial plan, or making important financial decisions.

Financial Advisor vs Financial Planner vs Accountant

Here is a comparison of the roles of a Financial Advisor, Financial Planner, and Accountant:

Role Financial AdvisorFinancial PlannerAccountant
DefinitionA professional who provides financial guidance and advice to individuals and businessesA professional who helps clients create and implement a comprehensive financial planA professional who performs accounting and tax services
ServicesInvestment planning, retirement planning, estate planning, tax planning, risk management, and budgetingComprehensive financial planning, including investment planning, retirement planning, estate planning, tax planning, risk management, and budgetingTax preparation and planning, bookkeeping, financial statement preparation, and auditing
FocusHolistic financial planning and managementComprehensive financial planningRecord-keeping, financial reporting, and tax compliance

Here are certifications relevant to the three roles.

💡 These roles can overlap. Financial advisors and planners may also have an accounting background and offer accounting services. However, in general, a financial advisor focuses on providing holistic financial management, while a financial planner focuses on comprehensive financial planning, and an accountant focuses on record-keeping, financial reporting, and tax compliance.

Do you have any questions? Feel free to share your thoughts with us in the comments.

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