A financial planner is a qualified investment professional who helps individuals and corporations meet their long-term financial objectives. Financial planners do their work by consulting with clients to analyze their goals, risk tolerance, and life or corporate stages, then identify a suitable class of investments for them. From there they may set up a program to help the client meet those goals by distributing their available savings into a diversified collection of investments designed to grow or provide income, as desired.
A financial planner’s primary role is to assist clients with creating personal budgets; establishing objectives for saving; minimizing, controlling, and/or managing expenses; and implementing the necessary steps for creating and accumulating wealth. Financial planners work with investment managers, mutual funds, and/or financial advisers to meet their respective clients’ investment needs.
A financial planner’s occupation requires that they remain up-to-date with current tax legislation and financial product developments and the necessary personal financial management strategies on retirement and estate planning. Hence, they should also have good sales skills. They will need to obtain new clients (when necessary) and be innovative in crafting solutions to improve their clients’ financial situation and ensure that goals are met.
The duties of a financial planner typically include providing investments and insurance services to clients, ensuring sound client record-keeping, establishing and maintaining relationships with clients by remaining up-to-date with the clients’ successes, and regularly communicating relevant changes that may impact the financial position of the clients.
They also serve as a middleman for clients and other financial professionals, who offer guidance on legal, estate management, and personal tax planning.
Types of financial advisors
- Investment representatives
Investment representatives are popularly known as stockbrokers. They help investors in buying and selling different investments. For example, stock, mutual funds, bonds, etc. Investment representatives are part of brokerage firms and are registered investment dealers. They earn a percentage commission on every buy and sell transaction.
- Investment advisors
An investment advisor is a person who is capable of managing all your investments. He can also provide investment suggestions on any financial instrument. Investment advisors are part of registered Portfolio Management companies. Also, investment advisors either charge a flat fee for their service. Or an annual fee depending on the size of the portfolio.
- Mutual fund advisor
Mutual fund representatives are certified agents that help you in buying and selling mutual fund units. The dealers earn a commission from the asset management company for every sale.
- Personal banker
Personal bankers are agents that are employed by trusts and banks. These bankers help you in buying and selling savings schemes such as bonds and some government offerings. Some personal bankers sell mutual funds too.
- Financial planner
A financial planner works closely with you to identify your financial goals and help you realize them over the long term. The financial planners also help you in financial planning, investment planning, retirement planning, tax planning, risk management and many more. They try to strike the right asset allocation to help you reach your goals
- Insurance advisor
Insurance advisors are licensed representatives that advise on insurance products. They specialise in selling certain insurance products like life or property insurance. Or sell a range of all insurance products.
- Customer Service representative
Customer Service Representatives often offer one-time service. They help you in opening a bank account or choosing a loan or credit card. They also help in comparing various mortgage and loan options. Additionally, they may advise on saving bonds and some government offerings.