Financial Advisor
Career information and advice on being a Financial Advisor

As a Financial Advisor you would be involved in providing investment advice and Financial Planning services to individuals and to businesses. A Financial Advisor is responsible for planning and executing a clients’ investment portfolio to maximise profit. This would include understanding capital gains, tax implications as well as acceptable risk levels.

This would be done by managing and planning a portfolio spread over a number of investment types including stocks, bonds, mutual funds, REITS, options, futures, notes and Insurance products. You could work on a commission structure with your client or on a fee paying basis.

There is also a difference between ‘Fee-Based’ and ‘Fee-Only’ advisors. ‘Fee-Based’ advisors charge fees and collect commissions. ‘Fee-Only’ advisors receive 100% of their income from the client, meaning that they are not swayed by incentives offered by commissions or referrals. A Financial Advisor has the option to work in one of three ways, these are: ‘tied’, ‘multi-tied’ or independent.

A Tied Financial Advisor usually works for a bank, building society or insurance company and only offer the products that are available from that company.

As a Multi-Tied Financial Advisor you would be dealing with a number of companies and only sell their products.

An Independent Financial Advisor (IFA) is not tied to any particular organisation and as such is able to offer the entire spectrum of products and market advice.

Financial Advisor Functions Include

As a Financial Advisor, your functions would include the management of your clients’ current financial portfolio and working towards growth for the future, based on a sound investment strategy. You will need to be aware of all the financial products available and research them to find the most suitable.  You will need to asses their performance record and options available to suit individual circumstances and client preferences. For example some clients will prefer to take risks for the possibility of higher returns whilst others prefer a more secure portfolio.

You will need to be fully up to date with complex financial products so that you are in a position to explain these clearly to your clients for them to make an informed decision. Financial Advisors also need to meet Sales targets, if working as an employed advisor. You would also be expected to negotiate with the providers of financial products to get the best deal for your client.

The role of a Financial Advisor is extremely complex and as such it is imperative that you are able to keep detailed records and produce financial reports that are compliant with various laws pertaining to the profession. You would also need to keep your clients updated about their investments, as well as keep yourself up to date with new investment products and changes to the law. The guidelines and rules of the Financial Services Authority (FSA) would need to be followed strictly to ensure that you act fairly and that you are qualified to give advice.