A financial advisor is a person who is responsible for the advice about your financial problems. He should be a finance professional. They can be an advisor of an individual or entity.

They help a person or company to reach their maximum financial potential and to achieve their business goals. They make the strategies and make more ways for businesses grow more by reducing the cost and bringing in new business ventures.

Role of Financial Advisor:

A financial advisor has different roles for individuals and companies respectively. They are divided into two main categories as given below:

  • Individuals: An individual can advise them to save more and make wealth. They can do it by constricting their portfolio of financial investments that will be well suited for their clients. Some of them will be risk-takers when you guide them. They will see the potential and greater reward in the longer run.


On the other hand, there is a type of customers, who are not willing to take the risk, and they will be happy in slower growth. You will show them your lower-risk portfolio as well. It can be difficult for you to determine the risk attitude of a customer. Because it depends on many factors of an individual. So, a financial advisor might ask about age, marital status, income, expenses and savings in order to understand his individual client.

  • Companies: In this case, a financial advisor helps them by providing a neutral perspective of corporate-level developments. For example, if a company wants to build a new factory to expand its operations, then a financial advisor can help them to assess the profitability of the project. To achieve the maximum profit, a financial advisor can present his findings to the company so that they can analyze with the management to have a second opinion on the leadership.

Financial Advisors vs Planners:

A financial planner is a person who plans out things for individuals and companies to set their long-term financial objectives. It is the one particular type of financial advisor. They might have specialized in investments, taxes, or retirement plans. They might hold multiple licenses or designations like CFP1.

Why you should go for a Financial Advisor?

Before you go for a financial advisor, you should ask yourself what type of financial advisor you need in your life. First of all, when you think of going to the financial advisor you should ask yourself what your requirements are, objectives, and needs.

You will have to be ready to explain to them your particular money management problems. You should know the fact that they are more than just advisors. They can chart a course for your financial problems so you can make sure smooth business transactions. It depends on what is your age? what are your long-term goals? If you are young and without family then you can just plan out your retirement.

Why financial planning is important?

To fulfill your long-term financial goals, you will have to consult finance experts called financial advisors. There are some of the main points2 which we have jotted down given below:

  • Income: Through proper planning you can manage your income in more effective ways. If you can successfully manage your income through proper planning, you will know how much money you have to pay for taxes and other expenditures.
  • Capital: When there is an increase in your cash flow, it might increase your capital. It will allow you to consider making some investments for the betterment of the business.
  • Cash flow: You can increase your cash flow by monitoring your spending and overall expenses. By carefully planning, budgeting your expenses, tax planning will allow you to keep your hard-earned cash.
  • Investment: By considering your circumstances you need to have a proper financial plan. To lift your goals, personality and needs you need to make proper investments with proper guidance.
  • Living standard: You can boost your standard of living with the savings you have by planning your finances. For example, you can make sure there are enough funds in your savings so that you can recover any lost income.
  • Assets: Some assets are liabilities; you can have the cushion to make new assets by having proper knowledge of which type of assets you are investing in. You need to know the real value of an asset. If you plan things from the beginning it will not become a burden for you in the future.
  • Savings: There is a saying that you need to have some savings for a rainy day. You can be thrown out of the track with sudden changes in finances. You should have some investments with high liquidity in the form of savings. It can be utilized in ups and downs.
  • Family Security: No one can deny the fact that family is above all. It is essential to have a financial security. You need to have a proper insurance coverage and your family have a peace of mind.

Key Responsibilities:

There are some of the key responsibilities of a financial advisor:

  • They need to meet the clients so they can guide them about their current financial needs and set their goals to achieve maxim.
  • They have to make plans for different type of financial solutions. Considering the financial needs and objectives of their clients, they can plan how to make proper decisions.
  • When market goes rocky and emotions are high, they need to guide their clients with proper facts and figures and rectify all the concerns of their clients.
  • They need to keep themselves fully updated about market events, upcoming problems and any political issues.
  • They should market their services to find new clients.
  • They should consider other professional advisors for additional guidance to the clients. For example, they can utilize the services of a legal advisor in order to make sure their clients are not dealing with any kind of illegal activity.
  • They need to make sure there will be no ambiguity in their guidance or it will be an act of crime. They can be arrested for fraud.


1 https://www.investopedia.com/terms/c/cfp.asp