Financial Advisors Financial advisor should have series 65 or 66 and series 7 examination for their qualification in United States. For designation and compliance of qualification they must report the issues for the public view according to FINRA that is Financial Industry Regulatory Authority in United States. According to FINRA the groups who can use the term of financial advisors are lawyers, private bankers, investment advisors, brokers, accountants and financial planners.Financial advisors are the professionals who give services to the people depending upon their financial condition. Financial advisors undergo special training before giving their services around the globe and they must be registered to offer professional services with a regulatory body. Financial advisors are recognized with many names as investment advisor, private banker, attorney, insurance provider, insurance agent and accountant.

Role of Financial Advisors:

Role of financial advisor is to provide financial services and products and these services depend upon their examination qualification and skills. They are not licensed, they are only registered. This can be explained with the help of example that a licensed insurance agent holding the series 7 qualification examination is able to sell life insurance and other annuities to both and a broker holding series 7 qualification examination can also be a financial planner. If an advisor does not have the CFP (certified financial planner) designation but he can say that he is a financial planner. A financial advisor gives their services by creating finance documents for their clients or by selling financial products with both of these. They may also help them giving more details on savings.

Types of Financial Advisors:

There are seven types of financial advisors

  1. Customer service representative

These types of advisors you will find in the financial institutions where you are holding an account or you have to apply for a loan. They will help you in one time decision making like choosing a credit card or bank account. They will help you to compare mortgage options and loan. They will also give you advises on investment products that are short term like saving bonds etc.

Customer service representative do not directly cost to you for giving advises because they usually get their salary where they work in a financial institution. This cost of advises is already built in your service fee or the investment you made. Customer service representative advisor will only recommend the products that financial institution is selling where these advisor are working.

  1. Personal banker

These types of advisor work for trust companies and banks they are given the training of selling investment like saving bonds and GICs. They are also registered to sell mutual funds to the clients personal bankers also don’t cost you directly for the services they are giving because they are getting a salary from the trust company or bank they are working for. Same as customer service representative cost of your service is built in the investment you made.

  1. Mutual fund representative

Mutual fund representative are registered as mutual fund dealers in the company they are working. Role of mutual fund representative is to sell or buy mutual funds on your behalf. They are usually paid by the specific company whose products they are selling. Every time they sell a fund they will make their money. If anyone decides to buy the fund, the cost is already built in that fund cost to him.

  1. Investment representative

Investment representative are also known as stockbrokers an they are registered representatives. Their role is to sell or buy a variety of investments like bonds, ETFs, close-end funds, stocks and mutual funds on your behalf. They will take their commission from you ever time they buy or sell your investments. The firm they are working for are usually known as brokerage firms and they are registered as investment dealers in that.

  1. Investment Advisor

Investment advisor will advise you on any type of security you need. They are the advisors that manage your investments you made. They are registered as portfolio managers in the firm they are working for. And these firms can be owned by a bank or these firms can be independent. Investment advisors only deals with the Rich client who is ready to invest at least $250,000 in that firm. These type of advisors can charge an annual fee depending upon the size of investment for their services or they might charge a flat rate fee for the services they are giving to you.

  1. Financial Planner

If you are setting your goals to achieve your financial plan then Financial planner is the one who can help you out. They will help you by giving advises if you are looking for financial planning, estate planning, risk management, investment planning and retirement planning. These types of planners can be paid in different way. So you must ask them before taking advises that how he must be paid.

  1. Insurance Advisor

Insurance Advisors are the licensed and registered advisors and they are trained to give advice about the buying and selling of insurance. They are trained and specialized in different products like property or life insurance while others are trained and specialized and trained in selling other insurance products. They are some advisors that are registered to sell specific investments. These types of advisors get paid by the company they are working for and whose products they are selling but they will make money every time they sell any policy. If anyone decide to buy that policy their cost is build in the payment of investment you are buying.

Pros and cons of financial Advisors:

Pros of financial advisors are they can earn a unlimited earnings through big investments.

They have a flexible work schedule

They will have the ability to crafts one’s practice

Cons of financial advisor they need a time to build their trust in client which is very difficult

Being a financial advisor you will face lots of stress

And you have to make a huge effort to meet regulatory requirements.

References:

  1. https://en.m.wikipedia.org/wiki/Financial_adviser
  2. https://www.getsmarteraboutmoney.ca/plan-manage/getting-advice/finding-an-advisor/7-types-of-advisors/