The Role Of A Financial Advisorby Jessica W. Writer
There are different notions related to the work and role of a financial advisor and none of them are patently untrue. Still one needs to understand the nuances between all the major roles played by a financial advisor.
What is a financial advisor for? Based on one perception, financial advisors are learned professionals with ample knowledge of market, direct their clients into making right financial decisions. This perception is not necessarily wrong but your financial advisor is not a soothsayer. He/she can not foresee the future. The truth is that no one knows what will happen next in investment markets.
Some people may still think a financial advisor’s role is to deliver market-beating returns, year after year. Generally, those are the same people who fail to differentiate advice from prediction.
A good finance advisory company plays multiple and nuanced roles with its clients, beginning with the needs, risks, and circumstances of each individual and irrespective of what is going on in the world. Another point to add to the line of services provided by the financial advisory companies include lending out loans. There are certain companies in Australia who take care of your every need from advising you to making arrangements for your loan.
None of these roles involve making forecasts about markets or economies. Instead, the roles combine technical expertise with an understanding of how money issues intersect with the rest of people’s complex lives.
There are many roles of a financial advisor and some of them are as follows:
1. The expert – Advisors often play the role of an expert, providing client-centred expertise in assessing the state of finances. They also help their clients with risk-aware strategies to help them meet their goals.
2. The listener – The vulnerabilities triggered by financial uncertainty are real. A good advisor will listen to client’s fears, eliminate the issues from their mind, and provide practical answers.
3. The teacher – Visualising beyond the risk to teach the investors about potential returns, is just another way of acting as a financial advisor.
4. The architect - Once the lessons are understood by the clients, the advisors become architects, building a long-term wealth management strategy that matches each person’s risk appetites and lifetime goals.
5. The coach - Even when the strategy is in place, doubts and fears arise inevitably. At this point, the advisor becomes a coach, reinforcing first principles and keeping the client on track.
6. The guardian – When all the work is done, financial advisors still do not get to rest. Advisors have to stand at the back and safeguard every client looking for any oncoming issues.
7. The insurer – Advisors play a significant role in insuring clients from unforeseen losses by providing them with practical advices and ideas to put effort in feasible risk insurance policies, so that they do not fall and keep moving on track to achieve their financial goals. This risk management is efficiently carried out by advisors in order to safeguard clients’ investments.
Moreover, investors are aptly secured from risks from irrational conduct affecting financial products and services, which also include credit. This step is put forward by ASIC, a governing body ensuring the financial wellbeing of all Australians.
These are just seven valuable roles, a financial advisor can play in understanding and responding to clients’ needs, which have polar difference from the old notions of how a financial advisor works. But it is also important to remember that a financial advisor has responsibilities beyond these.
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Created on Jul 17th 2018 08:38. Viewed 222 times.
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