Financial advisor

The term financial advisor is already self-explanatory. Usually, they are accredited finance professionals that have proven extensive expertise in the field of finance and investing. They are expected to know the intricate details of most public stocks, mutual funds, bonds, and other insurance products. They should be able to provide unique financial advice that takes into account their clients situation. Whether the client is a fiscally conservative individual or an overly aggressive one, financial advisors should be able to meet the demands and needs of each client.

If their client happens to be conservative and just wants a simple asset appreciation throughout the years to provide for their nest egg retirement then financial advisors would recommend very stable investment options. On the other hand, if their client is raring to go for the highest growth opportunity available, then financial advisors would usually recommend high-growth stocks and speculative investments.

Consequently, there are two types of financial advisors that can be clearly distinguished these days. The first type of financial advisor would be the fee-based type of advisor. That is to say, this kind of advisor gets their income from giving an advice to their client.
The other type of financial advisor is commission based. Their commission comes from the company whose financial product they recommended.
If you want to consider which kind of service is better for you, it helps to know that the
fee-based type of financial advisor has no conflict of interest with the interest of their clients since they can’t possibly be influenced by the commission from companies that they might otherwise have gotten.

Although the computation of the amount of money you would need to put in every different type of investment can be done by any software out there, computers alone can’t replace the financial advisor. The reason why you can’t replace your financial advisor with just financial software is because you still need a human’s expertise to decide what amount you would allocate to each different asset class while accommodating the personality of the client for the risk associated in each asset that they invest in.

If you want to be a financial planner in the US, you would need to be registered as a financial advisor by the FINRA. This is the government agency of the US that regulates the activities of every financial advisor of every kind. A controversial issue arises when brokerage firms still claim an exemption of this kind of license for their employees that recommend their product or services. This is the same issue that you encounter with dealing with a commission based financial advisor. The public should be wary of the advice given to them by these self-proclaimed “experts” on the finance world. Everyone would do well if they watch out for possibilities of self-interest recommendations by misleading financial advisors out to get a profit for themselves.

It is still advisable for everyone to do their own due diligence and check the facts of the recommendations given to them. Its nice to hear a stock that is bound to break all records for growth but it doesn’t make good sense to put all of your trust into the simple words of an advisor that might not have your best interest at heart.