Financial advisors, also called financial planners or money managers, are individuals who are licensed under the law of the United States, to provide a host of financial-related services in the form of planning, investments advice, wealth building and other areas of a business or individual’s finance, with the goal of attaining financial security in the future. Some of the most successful money book authors are financial advisors.
Today, there is a surge in the need for financial advisors due to the growth in the retirees market. Expertise in the areas of savings, risk management, inflation protection, budget allocation, and re-investing are key considerations by the retiree demographic.
Financial advisors are compensated in two ways. First, as fee-only, meaning, they receive a fixed rate for their services (which could be per hour or a regular monthly or weekly rate) directly and only from their client. The second is fee-based, where aside from payments for their services from the client, they also get a commission for every successful investments entered into by the client, like property purchase or stocks investments.
A good financial advisor must have the necessary credentials and experience in all aspects of business and family or individual finance management, especially in key areas like portfolio structuring for individual clients), inheritance management for families, taxation and fund sourcing for small to medium businesses, and benefits package for large businesses and corporations.
In the United States, the Certified Financial Planner (CFP) Board of Standards, Inc. oversees the eligibility of financial advisors. The Board ensures that the financial advisor meets the requirements in education, experience, and in adhering to the CFP Code of Ethics.