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Financial advising
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Financial advising

What is financial advisory? Click to read

Financial advisory services are provided by a team of qualified professionals that provide advice on how to manage money and assets efficiently. Financial advisory services can include a whole range of individuals such as certified financial planners, wealth managers, investment advisors, and certified public accountants.

Specialised companies usually offer different types of advisory services:

  • Investment management
  • Risk management
  • Retirement planning
  • Estate planning
  • Financial planning

 
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What is the role of a financial advisor and why you need one? Click to read

  • A financial advisor provides financial advice or guidance to customers for compensation.
  • A financial advisor can be a useful profile to contact in case you need advice about how to reach your financial goals, or simply need support to manage your finances. 
  • An advisor can also inform about financial products, tax advantages, and insurance options.
  • When looking for an advisor, it is important to make sure that he/she carries certified licences to conduct business with the public. Check for information about licences and certifications in your country!
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Financial advisors vs Financial planners Click to read

  • The role of a financial planner is slightly different from the one of the financial advisor.
  • The financial planner is one particular type of financial advisor who specializes in helping companies and individuals create a program to meet long-term financial goals (Investopedia).

The main areas of expertise of a financial planner are: retirement, allocations, investments, estate planning and taxes. Also in this case, you should check that the planner has the right certifications.
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Types of Financial advisors Click to read

There are 2 main kinds of financial advisors:

  • independent financial advisors give unbiased advice about the whole range of financial products from all the different companies available;
  • restricted advisors give advice on a limited range of products. They may specialise in one area, for example pensions, or they may only offer advice on products offered by a limited number of companies (Citizens Advice).
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Getting the right advice Click to read

Tips to understand if the services that the advisor recommends you are suitable for you:

  • First think about your resources and then choose the product that is affordable for you.
  • Take account of whether you want to save for the long or short term; planning in advance helps you to have realistic objectives.
  • You should think about the risks linked to the financial operation you are going to choose, if you will be able to overcome them.
  • Take account of whether you pay tax.
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Questions to choose the right financial advisor Click to read

  • Is he/she a registered advisor qualified to provide financial advice?
  • How much is the price for his/her service? Is there an hourly fee? Or does he/she take a percentage of your total assets? Does he/she receive additional commission on your investments? Or is he/she a fee-only advisor?
  • What services does he/she include? Only investments management or also more advices on your finances? 
  • How often will he/she be in touch and how?
  • What is his/her typical client?
  • What is his/her investment approach? Does he/she take risks to get a bigger gain? Or is he/she rather prudent?
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Checklist for the first meeting with an advisor Click to read

  • Make sure that the advisor you contacted carries the necessary certifications.
  • Take notes so that you have a clear record of what was said at the meeting.
  • Prepare your meeting by writing down your questions.
  • Take time to think about any decisions or to compare products with another advisor before signing any document.
  • Answer all the questions honestly.
  • Check that your personal information is kept confidential.
  • Ask people around you (friends and family) if they have an advisor to recommend.
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Summing up

Summing up Click to read

Financial advising
A number of financial services provided by qualified professionals.

Types of advisor
There are different advisors with different specializations. You should choose one that matches your needs.
   

How to choose
Before choosing an advisor you should ask yourself a range of questions.

Financial advisor
A qualified professional providing guidance about financial products, tax advantages, and insurance options. 

Meet your advisor
It is important to carefully prepare the first meeting with the financial advisor.
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Test
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Related Glossary:
  • A financial planner:
    a person working with clients to help them manage their money and reach their long-term financial goals by proposing a specific service (Investopedia).
  • Financial advisor:
    a person whose job is to provide financial advice to clients (Oxford Languages).
  • Financial risk:
    Financial risk is the potential losses incurred by an investor when investing in a business that uses borrowed money (Accounting Tools).
  • Investment:
    the act of putting money, effort, time, etc. into something to make a profit or get an advantage, or the money, effort, time, etc. (Cambridge Dictionary).
  • Licence:
    an official document that gives you permission to own, do, or use something, usually after you have paid money and/or taken a test (Cambridge Dictionary).
  • See all terms
Keywords

Financial advisor, investment, risks, advice, licence

Objectives:
  • Get acquainted with the concept of financial advisory.
  • Know the services and support that a financial advisor can offer.
  • Be able to choose a financial advisor and to ask the right questions according to your financial needs.
  • Know the concepts of licence, financial risk and investment.
Description:
  • Define the concept of financial advisory and the role of financial advisor.
  • Choose the financial advisor who best suits your interests and personal situation.
  • Prepare a meeting with a financial advisor by keeping into account your own needs, financial objectives and possibilities.
  • Define the concepts of licence, financial risk and investment.
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