Financial Advisors, Investment Advisors
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A financial advisor offers advice to clients on investment and asset management. An independent financial advisor is usually an expert in recommending which products to buy and when to buy them. These financial products may be stocks, bonds, currency futures and the like.
Table of Contents
Financial Advisors: What do they do?
Financial advisors help in planning, time framing and structuring complex investments. Financial advisors offer their servicesin the following arenas:
A financial advisor offers advice to clients on investment and asset management. An independent financial advisor is usually an expert in recommending which products to buy and when to buy them. These financial products may be stocks, bonds, currency futures and the like.
Financial Advisors: What do they do?
Financial advisors help in planning, time framing and structuring complex investments. Financial advisors offer their servicesin the following arenas:
Annuities: These are financial products similar to insurance. Investors make and receive payments at regular intervals,which may be weekly, monthly, quarterly or annually. An investor should be careful in trading annuities because once the financial transaction is done, s/he cannot make any changes. Most annuities offer tax-deferred earnings growth and some may offer a death benefit.
Endowment Policies: These financial products are similar to life insurance contracts, with maturities of ten to twenty years. Most policies make a lump-sum payment on maturity and on death, if it is before the maturity date. Some policies also payin case of critical illness. When looking to sell an endowment policy, one should consult a financial advisor as the process isquite complex.
Tax Planning: Arranging your financial affairs could help you minimize your taxes. A financial advisor can help you increase your deductions and take advantage of tax credits.
Mortgage: This is among the biggest financial investments made by an individual and there are several loan options. These involve intricate financial transactions and documentation.
Protection Products: These financial products include income protection, life insurance and critical illness protection. The deals are varied and are impacted by several factors, including age, medical history, occupation, whether you are a smoker and how much protection you wish.
Pension: Retirement plans may be offered by your employer, insurance companies, the government or other institutions like trade unions. Financial advisors help with choosing a pension plan and pension transferring.
How to Choose an Independent Financial Advisor?
A financial advisor should:
- Be a non-tied advisor, as a tied advisor can sell the financial products of only limited providers.
- Offer services on both commission and fee basis.
- Be able to give a break up of the cost of products involved.
- Be open to supplying references.
- Be well qualified.
- Be able to understand a client’s risk profile and suggest products accordingly.
