The Definition of a Financial Advisor
Financial Advisors are the type of professionals that people run to when they have financial problems or are afraid to make a big financial decision on their own. They provide assistance and advice regarding different money issues people may have such as investments, mortgages, taxes, insurance, savings, estate planning, retirement, etc.
Reasons Why People Need a Financial Advisor
There are numerous different situations and reasons where a person may need a Financial Advisor. There are also several types of people who may need advice, and some of them may have not even realized it yet.
A few examples of the latter are elderly employees who plan on retiring soon. Some people don’t realize that retiring is more than just finally getting a break from work due to old age. In reality, it’s a stage where people should be careful and conscious of their financial status and plans more than ever.
However, even younger adults can fall prey to not realize the importance of a Financial Advisor. For example, young adults who impulsively make a big investment or start a business without first settling their finances.
Sometimes even the simplest reason such as a plain desire/wish to learn about properly handling your assets is enough to hire a Financial Advisor. That’s not all, here are a few other reasons why some people may need a Financial Advisor:
- When they’re too busy or don’t have enough time to allocate into focusing on making a solid financial plan.
- When the field of finance is simply not in their line of expertise.
- When they only have basic knowledge of financial planning.
- When they think they’re going in the wrong direction with their finances.
- When they need someone to find weak points in a strategy they made themselves.
Types of Financial Advisors and How They Work
As a whole, Financial Advisors are qualified professionals who are well-versed in several fields of financial management. Take note though that while there are advisors who excel in more than one field, there are also specialists who focus on one area.
These specialists can come in handy in cases when you need financial advice, but only on one aspect as you have the rest covered. For you to be aware of these types of financial specialists, here is a list:
- Certified Financial Planners are what we call Financial Advisors who cover more than one field in finance management. These are generalists who have taken and completed special courses in estate planning, insurance, taxes, retirement and investing. They can provide advice in almost any question/concern a customer has, regarding his/her finances.
- Certified Public Accountants are known to be the oldest type of financial credential in the United States. They’re accounting specialists who can help you organize investments, do estate planning, and prepare your taxes. They can also advise you on how to save on the most tax-favorable ways.
- Enrolled Agents are the more affordable version of Certified Public Accountants (CPAs). Like CPAs, they assist you in preparing your taxes. However, if you have a complicated issue with your taxes or need further advice regarding accounting, bookkeeping, etc., it’ll be better to consult a CPA.
- Chartered Financial Analysts are experts in investing. They’re known to be the most prestigious financial designation as the requirements for qualification include: 1. completing a 3-year course, 2. Taking and passing a difficult board exam, and 3. Attain four years of professional work experience.
- Chartered Financial Consultants along with Chartered Life Underwriters specialize in the fields of both estate planning and life insurance. While they’re skilled in both fields, ChFCs are more recommended when it comes to financial/estate planning. CLUs, on the other hand are more focused on life insurance compared to ChFCs.
- Certified Employee Benefit Specialists sell and administer employee benefit plans. These are people who have taken and passed courses covering retirement, regulatory issues, pension, insurance, etc.
- Chartered Mutual Fund Counselors and Certified Fund Specialists are both experts when it comes to mutual funds. They advise you on the best type of mutual funds you can invest in and put in your portfolio.
Financial Advisor Washington
You can find a good number of skilled Financial Advisors in Washington and in other places in America. They’re not at all rare, and they’ll be more than willing to listen to your financial problems and come up with the best solutions for you.
It’s also common for financial planning firms to have their own website. So a simple search on Google can be all it takes for you to land a great Financial Advisor who’ll be your “money partner” for a long time.
Since finding a good advisor is easy, you can always find the necessary financial help whenever you need it!
