Types of Financial Advisors
A financial consultant or financial planner is an independent professional who offers financial advisory services to customers according to their current financial circumstance. In the United States, financial planners must obtain certification from the National Association of Insurance Commissioners or the Department of Financial Services Bureau of Securities and Insurance. In most states, financial planners must also complete certain training and be licensed with a state-regulated regulatory agency in order to offer financial advice to their clients. The financial planner typically will have a bachelor’s degree and experience in finance, insurance, or investment management.
An advisor can be self-employed, a member of a firm that represents several other financial advisors, or an employee of a large corporation providing financial advice to smaller clients. There are many different types of financial advisors and they come in many shapes and sizes. Most self-employed advisers are considered self-employed entrepreneurs, while employees are usually hired to work for a company and then become a full-time employee. Many financial advisors work with pension or retirement plans, mutual funds, or certificates of deposit (CD) accounts. However, not all financial advisors provide all three services.
The typical fee-based financial advisors offer investment advice as well as a diversified portfolio of stocks and bonds to meet the needs of their clients. While some advisers may only offer a stock-oriented service, other financial advisors offer a wide variety of financial products such as individual and family investments, certificates of deposit, managed futures and options portfolios, and even prepaid interest bearing accounts (PIB). In addition, fee-based financial advisors offer transaction-related services including foreign exchange, option trading, spot foreign currency, and commodity and bond markets. If your financial plan requires comprehensive coverage, you may want to consider a fee-only financial advisor. However, if you are only looking for a simple and basic financial planning service, then a fee-based financial advisor may be suitable for your needs.