What Is a Financial Advisor?


A Financial Advisor provides counsel and advice on managing money, investments and other financial decisions. Put simply, they listen to your goals and help you realize them by putting together a comprehensive financial plan. They can also provide guidance on how to minimize taxes and choose investments that fit your lifestyle.

There are several benefits to having a Financial Advisor to help you build and reach your financial objectives. Below are just a few of the many benefits of working with a financial advisor:

  • Individualized assistance tailored to your unique financial needs
  • A dedicated partner to track your financial progress
  • Assistance with long-term investment planning
  • Expert insight and guidance to help you achieve financial goals

Professional Qualifications

A financial advisor helps their clients with making smart financial decisions. As such, they provide sound advice and guidance on managing their money. They are commonly specialists in retirement planning, estate planning, putting together investment portfolios, and more. It is expected that financial advisors have all the qualifications necessary to provide services confidently and competently.


Most financial advisors hold a postgraduate degree in finance, accounting or economics, providing them with the theoretical foundation and broad understanding of the fiscal markets, investments and economic trends. At times, financial advisors may also need to take courses to obtain certifications in specific fields of financial advising, such as estate planning or tax services.

Licensing & Accreditation

All financial advisors should be licensed to provide financial advice and services. In the United States, this requires a Series 6 license, which is issued by interviewing with the Financial Industry Regulatory Authority (FINRA). In addition to this, financial advisors ought to have the appropriate credentials such as the Certified Financial Planner (CFP) designation or a Chartered Financial Analyst (CFA) certificate.

  • The Certified Financial Planner (CFP) designation is conferred by the Certified Financial Planner Board of Standards, Inc. (CFP Board) and identifies advisors who are able to provide comprehensive financial planning services.
  • The Chartered Financial Analyst (CFA) certificate is recognized by many investors and financial advisors, and is issued by the CFA Institute which tests the financial analyst’s level of knowledge in economics, accounting, investment management and ethics.

Different Types of Financial Advisors

Financial advisors are individuals or organizations that offer financial guidance, advice and portfolio management for a fee. Different professionals offer different services which generally fall into one of three categories: fee-only advisors; fee-based advisors; or commission-based advisors.

Fee-only Advisors

Fee-only advisors charge for the services they provide and don’t accept commissions, bonus payments, or any other type of compensation from a third party. Their primary concern is to provide unbiased advice and portfolio management. Fees come in the form of a percentage of assets under management, hourly charges, flat retainer fees, or any combination of the three. Similarly, compensation may also be based upon a client's net worth, creating an incentive for an advisor to get the best return possible.

Fee-based Advisors

Fee-based advisors operate differently than fee-only advisors. They earn compensation from a combination of a percentage of assets under management, commission-based products such as mutual funds and insurance, and sometimes a fee-structure. Thus, they can offer clients a wider range of services and investment options and payars based on the performance of their portfolios.

Commission-based Advisors

Commission-based advisors are paid by the sale of financial products such as stocks, mutual funds and insurance policies. This type of advisor typically receives a commission every time an investment is sold, meaning they are incentivized to encourage clients to buy and sell often. Additionally, commission-based advisors may not always be able to provide unbiased advice, as they earn more money when their clients invest in certain products.

  • It’s important to understand how financial advisors will be compensated when seeking advice, as this may affect the quality of advice that is provided.
  • Fee-only advisors are generally compensated based on a percentage of the assets under management, an hourly rate, and sometimes, a flat retainer fee.
  • Fee-based advisors receive compensation from a combination of fees, commissions, and/or bonus payments.
  • Commission-based advisors earn from the sale of financial products.

Services Offered by Financial Advisors

Financial advisors are experts in planning an individual’s or an organization’s finances. They offer professional and reliable advice regarding several aspects of financial planning. The services they offer vary depending upon the size and objective of the organization. Some of the primary services financial advisors offer are:

Investment Advice

Financial advisors provide sound investment advice. They research and study the markets, financial products, and other options to develop sound strategies and make recommendations that can maximize returns and reduce losses. They also refer their clients to other financial professionals and products suited to their needs. Financial advisors guide the clients to make wise investment choices according to their financial circumstances, risk preferences, and investment objectives.

Estate Planning

A financial advisor helps individuals to create, manage and protect their estates. They assess the financial condition of their clients and develop effective approaches, such as asset protection, tax planning, and estate growth strategies. They use their expertise to provide comprehensive planning and maximize the client's returns. They develop estate plans with the assistance of different investment tools, trusts, life insurance and more.

Retirement Planning

Financial advisors provide advice on how to put money aside for retirement. They guide their clients to build their retirement corpus effectively and confidently. They provide advice on retirement investments, portfolios, annuities, pension plans, and other instruments to help grow their assets. They help clients to take advantage of retirement fund benefits, such as deferred taxes, and also provide advice on investing in different types of retirement accounts.

Tax Services

Financial advisors have knowledge on tax regulations and technologies. They help their clients to establish their businesses in accordance with the tax laws. They provide advice on reducing taxable liabilities and optimizing the client’s financial situation. Financial advisors plan tax strategies to preserve the client’s finances that are compliant with the law. They also keep their clients updated on the changing tax laws and regulations. They educate clients on the usage of available tax relief benefits and optimization techniques.

Financial Goals & Objectives

A financial advisor is a professional who provides customized and specialized advice about financial matters. This person is equipped to provide advice on investments, financial plans and many other matters related to money. Having a financial advisor can be beneficial in many ways; and one of those ways is to help you set and achieve financial goals & objectives.

Setting Goals

A financial advisor will work with you to help you set financial goals & objectives that are tailored to your unique needs. Your goals might include: paying off debt, budgeting, maximizing savings, minimizing taxes, etc. After you identify your goals, a financial advisor will create an actionable strategy that will help you to achieve those goals.

Achieving Goals

Your financial advisor will help you to put your plan into practice. They will review your progress and progress on a regular basis and can help you adjust as needed. They can provide guidance, advice and knowledge that is tailored to your specific financial goals & objectives. You will have someone to answer your questions, discuss strategies and provide solutions.

Having a financial advisor can help you to set and reach your financial goals. They can create personalized strategies, provide advice and knowledge to aid in the achievement of your goals, and be there to answer your questions. With the help of a trusted professional, you can confidently work towards achieving your financial goals & objectives.

Compensation Models

Financial Advisors ask for payment for their services in various ways. Generally, compensation for their services falls into three categories: flat-fees, hourly-fees, and commissions.

Flat Fee

A flat-fee is a set amount that the advisor is paid no matter the services they provide. The fee can be an up-front or annual lump sum or spread out over long periods of time. This is the ideal option for financial advisors when it comes to long-term planning as they can plan and strategize for the future without charging additional fees for every service provided.

Hourly Fee

This form of compensation entails the advisor being paid an hourly rate for the services provided. This is well suited for shorter-term financial inquiries and services that can be completed quickly. It is not an ideal situation however, when planning and strategizing is involved due to the fact that these services can take up a lot of time and require a significant financial outlay.


Financial advisors can receive commissions when they successfully broker a sale or trade. This form of payment is generally considered to be based on performance, so an advisor will only receive a commission if they make a successful sale. This is not a preferred option as it encourages advisors to push certain products to come away with a commission.


In conclusion, a financial advisor is a professional individual who offers financial advice based on an individual's goals, needs, and financial situation. Financial advisors offer expertise on how to best manage your money and investments, as well as how to create and maintain wealth.

Summary of What Financial Advisors Do

Financial advisors help you make the most out of your financial resources. They provide advice on a variety of topics such as budgeting, investments, retirement planning, estate planning, taxes, insurance, and more. They can offer personalized advice tailored to your specific goals and needs. They can also provide insights and strategies that you may not be aware of.

Why Engage A Financial Advisor?

Working with a Financial Advisor provides a great way for you to make sound financial decisions and secure your financial future. With their expertise and guidance, you can make the most of your finances and achieve your financial goals. In addition to the advice they provide, they can also help keep you stay informed and up-to-date on the ever-changing financial landscape.

  • Financial advisors can offer specialized, personalized advice tailored to your specific goals and needs.
  • They can provide insights and strategies to help you make the most of your financial resources.
  • Working with a Financial Advisor helps keep you informed and up-to-date on the ever-changing financial landscape.
  • They can assist you in making sound financial decisions and securing your financial future.

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