What a Financial Adviser Does — Occupation Overview
A financial adviser helps individuals and organizations plan their finances, make investment decisions, and reach long-term financial goals. This article breaks down the typical responsibilities, necessary qualifications, common fee models, and tips to choose the right adviser for your situation.
What Financial Advisers Do
- Assess client goals, risk tolerance, and current finances
- Create personalized financial plans
- Recommend investment strategies and financial products
- Monitor portfolio performance and re-balance as needed
- Coordinate with accountants, attorneys, and other specialists
Typical Day / Workflow
One day might include client meetings, research and analysis, preparing portfolios, compliance paperwork, and client follow-ups. Strong communication and analytical skills are essential.
Qualifications & Credentials
Common credentials include Certified Financial Planner (CFP), Chartered Financial Analyst (CFA), or specific licenses such as Series 7/66 (US). Education in finance, accounting, or economics is common but not mandatory if practical experience and certifications are present.
Fee Models
- Fee-only: Adviser charges a flat fee or percentage of assets under management (AUM).
- Commission-based: Adviser earns commissions from product sales.
- Fee-based: A hybrid of fee and commission.
How to Choose the Right Adviser
- Check credentials and regulatory records.
- Ask about conflicts of interest and compensation structure.
- Request references and a sample financial plan.
- Ensure communication style and availability match your needs.
FAQs
Do I Need a Financial Adviser?
If you have complex finances, lack time/interest, or want a disciplined retirement strategy, an adviser can add value. For straightforward goals and a willingness to self-educate, DIY investing may suffice.
How Much Does a Financial Adviser Cost?
Costs vary widely — from a few hundred dollars for a single consultation to 0.5%–2% AUM annually for ongoing management.