By Matthew Burnell, CFP®, MBA
A question that is often asked to me in my line of work is what is a financial advisor? A financial advisor is a broad title and can go by many names, often depending on what a particular firm likes to use or may have meaning depending on the types of clients one works with or a specialty they may possess. A few names that can be interchangeable include financial planner, registered representative, financial consultant, wealth advisor, wealth manager, investment advisor representative, etc.
For this article we will use the term financial advisor. As Financial Advisors, one primary responsibility of ours is to understand the financial goals of our clients which can include businesses, organizations and/or individuals, and use that understanding to help develop a plan to reach those goals. This is often established early in the relationship and updated as needed. During this process, educating clients on the steps being taken to reach these goals is important.
The exact duties that we as financial advisors perform will vary from client to client and will depend on what, if any, area of finance the advisor specializes in. However, most financial advisors will perform some combination of the tasks below.
Investment management: Offer advice on or directly invest in assets based on the client’s risk tolerance and goals. Assets can include stocks, bonds, mutual funds, exchange-traded funds, annuities, real estate, private equity and many other options. While we may handle the investment needs of our clients, we like to educate our clients as to how any of the investments meet their goals.
Taxation: Depending on the advisor, they may prepare tax returns, create tax plans and scenarios, educate or answer questions for specific individuals needs which can cover anything from the tax implications associated with actions taken in their portfolios to tax planning on the sale of a business that works into investable assets. As an example, our Wealth Management practice and tax practice allow us to coordinate our tax and financial planning for clients.
Retirement Planning: As financial advisors we like to run a financial plan to help clients make an informed decision on whether it is financially feasible to retire as they near that date. Having a strategy or plan on where retirement funding is coming from and how to distribute these funds to meet the client goals is a major point of this planning.
Estate Planning: Planning and solutions on how assets may pass to the next generation through wills or trusts or account titling or beneficiary considerations, planning around estate taxes, reviewing and discussion of estate planning documents and often coordination with the client’s estate planning attorney. Reviewing the estate planning documents allows us to map out how assets may pass to heirs or plan on how to protect assets from creditors or taxation.
Insurance: Advisors may sell insurance or review & educate to plan for the mitigation of risk. Depending on the individual, this might include health insurance, life insurance, disability and longterm care insurance, and property insurance.
Common general financial planning and advice: May include budgeting and cash flow, social security planning, health insurance, debt management, education planning, business succession planning and much more. Ultimately as advisors we like to be the first people a client thinks of when they have a financial related question and discuss.
As you can see from the above, there are many variables in the financial advisor realm. It takes many years and is often considerable education to become proficient as a financial advisor. Beyond that, it is also important that people work with an advisor that they enjoy working and interacting with and fits their communication style. If any of the above interests you, sitting down with us can help to identify where we may be helpful.
Securities offered through Cetera Financial Specialists LLC, member FINRA/SIPC. Advisory services offered through Cetera Investment Advisers LLC. Cetera firms are under separate ownership from any other named entity.