What does a financial advisor do?

Recently, 'do-it-yourself' investing has risen in popularity. But that doesn't mean people no longer need financial advisors. Many people still want help managing their finances, whether it’s coming up with retirement plans, debt management strategies, or diversifying their investment portfolios.

Also, nearly every business, big or small, is likely to face a financial crisis at some point. So, contrary to popular belief, Financial Advisors are not just for the wealthy. A financial advisor could help anyone assess their current financial situation, develop clear goals, and determine the best way to meet them.  

But unfortunately, there's always a lot of misinformation on what Financial Advisor do. So, if you'd like to pursue a career path in Financial Advisory but are unsure where to start, you've come to the right place.

This article will discuss everything you'd like to know about becoming a financial advisor and the skills and requirements you need to fulfill your role.

What is a Financial Advisor?

A Financial Advisor is a professional who helps people achieve their financial goals by providing expert financial guidance. That could include budgeting strategies, investment choices, or even retirement savings plans.

Therefore, a Financial Advisor could work at an investment firm, bank, Insurance company or be self-employed. In short, the Financial Advisors work is to help clients manage their wealth development and minimize debt expenses to enhance their profitability.

Although there are many different types of financial advisors, the most common ones include:   

• Certified Financial Planner
• Chartered Financial Consultation
• Asset Manager
• Broker
• Investment Advisor
• Robo Advisor
• Wealth Advisor

Benefits of Working with a Financial Advisor

Anyone can work with a Financial Advisor at any stage of their life. You don't necessarily need to have a high net worth- you just have to find an advisor who suits your needs.

That said, a financial advisor can help you:

1. Build a customized investment strategy that aligns with your specific goals and risk tolerance.
2. Pivot your strategy as the market changes.
3. Manage your investments and help you realize maximum benefit from your assets.
4. Identify the type of retirement accounts best suited for your long-term savings goals.
5. Prepare for unexpected financial crises like job loss, loss of property, or market dips that affect active investments.
6. Make reasonable decision during periods of market turbulence.
7. Navigate tax laws and regulations in order to limit tax penalties and liabilities.

Financial Advisor Job Description

When applying for a role as a Financial Advisor, you will mainly be required to act as an intermediary between the clients and the company that hires you. It could be an Insurance Company, Bank or Investment Firm.

You will be expected to understand the client's needs, conduct market research, and design effective financial strategies. That includes providing clients with comprehensive, tailored financial guidance and recommendations to help them maximize their financial potential.

Notably, most job offers also require someone with excellent communication skills and a deep understanding of financial products and services.

Financial Advisor Roles and Responsibilities

Your duties as a Financial Advisor may vary depending on the specific role you are required to play in your company. But generally, some of the responsibilities include:

• Meeting with clients individually and talking to them to determine their financial objectives, income, expenses, risk tolerance, assets, and any other information required to develop a financial plan.
• Offering clients strategic advice on investment products and services like Insurance, cash management, and debt management
• Answering questions that clients may have about the financial plans and strategies you've offered
• Implementing financial plans
• Managing and updating client's investment portfolios
• Contacting clients to inquire about changes in their financial status and plans
• Preparing and interpreting financial documents, performance reports, and income projections for the clients
• Performing market research to stay up to date with current trends in the financial markets
• Making sure clients comply with all rules and regulations in the financial industry

Financial Advisor Qualifications

To qualify for a role as a Financial Advisor, you must have the following skills and qualifications;

• Bachelor's Degree in Business, Finance, or a related field
• A Master's in Finance  or related field is a plus
• Proven work experience as a Financial Advisor, Financial Planner, Financial Controller, or Financial Specialist or relevant work experience
• Ability to communicate and negotiate effectively
• Proficient in Word, Outlook, Excel and PowerPoint
• A strong track record of successful financial guidance
• A current (FCA, CII, DipFA, CISI, or other) certification
• Ability to work with a computer and operate database systems

Financial Advisor Key Skills

A Financial Advisor is required to have several soft and hard skills. The hard skills are gained through educational training while the soft skills are acquired through practical experience and enable you to interact with your clients effectively.

With that said, here are the key skills that you need to have a successful career:

Research Skills

As a financial advisor, you must be adept at gathering and analyzing data to make well-informed recommendations. That includes examining a client's previous money management and how it contributed to their financial situation. Also, you need to stay updated on market trends, investment options, and financial regulations.

Analytical Skills

Financial Advisory often requires adjusting to changing circumstances, analyzing complex financial data, assessing investment opportunities, and evaluating risks. That's why you need strong analytical skills. It will help you develop sound investment strategies and make data-driven decisions.

Interpersonal Communication Skills

Communication is a crucial client-relationship tool that helps build trust and maintain clear communication. Therefore, Financial Advisors must have good verbal and non-verbal communication skills. They should be able to explain financial concepts so clients can understand, address their concerns, and establish strong, long-lasting relationships.

Risk Assessment

Before delivering any advice to their clients, Financial Advisors must assess and manage risks appropriately. They must gauge clients' willingness and capacity to take on risk and tailor their recommendations accordingly.

Attention to Detail

The financial industry demands precision and accuracy. Advisors must ensure that all financial documents, calculations, and transactions are error-free. That's why, as a Financial Advisor, you must have a keen eye for mistakes to prevent costly mistakes and maintain the client's trust.  

Find Out How to Become a Financial Advisor

To become a Financial Advisor, you need a minimum of a Bachelor's Degree in Finance, Business, Economics, Accounting, or a related field. But if you want to stand out from the other applicants, you should also have a Master’s Degree.

That will show you have advanced industry knowledge. If you're unsure where to start, Enroll for a Master's in Finance from EAE Business School Madrid and take advantage of the Financial Advisory Training Program.

This program will give you a firm grounding in the world of Consultancy and Management. It will equip you with the knowledge and skills to build suitable financial products and services for clients.

On the other hand, if you want to become a Certified Financial Planners, you must first complete a CFP Board Registered Program. Also, you could get a FINRA certificate if you want to sell products like bonds, securities, and mutual funds.

Financial Advisory Career Path- Final Thoughts

If you love working with spreadsheets, tracking investments, and calculating figures, a career as a Financial Advisor suits you. But you must keep in mind that there's more to the career than just working with numbers.

It's an opportunity to help people navigate a somewhat opaque industry. There are many different roles you can play as a Financial Advisor. However, you can choose your speciality depending on your interests and skill set.

While some Financial Advisors work in Wealth Management and Retirement Planning, others specialize in products like Insurance. All in all, a career as a Financial Advisor is rewarding and also helps you improve your own financial confidence.