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Personal financial advisors give financial advice to people. They help with investments, taxes, and insurance decisions. Most financial advisors work in the finance and insurance industry or are self-employed. They typically work full time and may meet with clients in the evenings or on weekends.
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Financial advisors assess the financial needs of individuals and help them with investments (such as stocks and bonds), tax laws, and insurance decisions. They help clients plan for short-term and long-term goals, such as education expenses and retirement. They recommend investments to match the clients' goals. They invest clients' money based on the clients' decisions. Many also provide tax advice or sell insurance. In determining an investment portfolio for a client, they must be able to take into account a range of information, including economic trends, regulatory changes, and the client’s comfort with risky decisions. A major part of a financial advisor’s job is making clients feel comfortable. They must establish trust with clients and respond well to their questions and concerns.
Personal financial advisors typically do the following:
Although most financial advisors offer advice on a wide range of topics, some specialize in areas such as retirement or risk management (evaluating how willing the investor is to take chances, and adjusting investments accordingly).
Many spend a great deal of time marketing their services, and they meet potential clients by giving seminars or through business and social networking.
After they have invested funds for a client, they, as well as the client, get regular reports of the investments. They monitor the client's investments and usually meet with each client at least once a year to update him/her on potential investments and to adjust the financial plan because of the client's changed circumstances or because investment options have changed.
Many financial advisors are licensed to directly buy and sell financial products, such as stocks, bonds, annuities, and insurance. Depending on the agreement they have with their clients, advisors may have the clients' permission to make decisions about buying and selling stocks and bonds.
Most financial advisors work full time, and 24% work more than 50 hours per week. They often go to meetings on evenings and weekends to meet with existing clients or to try to bring in new ones.
Private bankers or wealth managers are personal financial advisors who work for people who have a lot of money to invest. These clients are similar to institutional investors (commonly companies or organizations), and they approach investing differently from the general public. Private bankers manage a collection of investments, called a portfolio, for these clients by using the resources of the bank, including teams of financial analysts, accountants, and other professionals.
Financial advisors typically need a bachelor's degree. A master’s degree and certification can improve chances for advancement in the occupation. Although employers usually do not require a specific field of study, a degree in finance, economics, accounting, business, mathematics, or law is good preparation for this occupation. Courses in investments, taxes, estate planning, and risk management are also helpful. Programs in financial planning are becoming more available in colleges and universities.
Financial advisors who directly buy or sell stocks, bonds, insurance policies, or specific investment advice need a combination of licenses that varies based upon the products they sell. In addition to those licenses, smaller firms that manage clients’ investments must be registered with government regulators, and larger firms must be registered with whatever federal government agency regulates these services.
Financial advisors should be good at mathematics because they constantly work with numbers. They determine the amount invested, how that amount has grown or shrunk over time, and how a portfolio is distributed among different investments.
Financial advisors typically work in offices. Almost one-fourth of such advisors were self-employed in 2010. Many also travel to attend conferences or teach finance classes in the evening to bring in more clients. Most advisors work full time, and 24% work more than 50 hours per week. They often go to meetings in the evenings and on weekends to meet with existing clients or to try to bring in new ones.