If you’re in need of help with your finances, a financial consultant can assist you. Here are five facts about financial consultants.
Depending on the type of specialization a financial consultant practices, he or she may be bound by different legal standards and responsibilities, but every consultant operates by some code of legal conduct. Two good examples of different legal standards are broker-dealers and investment advisors. Broker-dealers operate within suitability standards, meaning they are obligated to put their employers first rather than their clients. Investment advisors, on the other hand, have a legal responsibility to put their clients’ needs first in their advice and decisions. This is called fiduciary responsibility, and it’s a way of ensuring the client receives the best results or pricing the advisor can provide.
While professional financial consulting doesn’t require a bachelor’s degree, there is still plenty of education involved in this career path. Many financial consultants do have degrees from colleges and universities, typically in fields such as business, finance, economics, and management. There are also certificate programs available specifically to train people to be a financial consultant. An advisor’s educational background may influence his or her specialization and thus his or her suitability to work with you and your needs.
Every financial situation is unique and can become complex depending on the factors involved. This is where professional financial consulting really comes in handy. If you’re overwhelmed by the numbers or the decision-making involved, a professional can take over for you or help you out. A really good financial consultant will understand that no two financial situations are alike and will be able to customize their approach to your situation to best fit your needs. Your financial advisor should be ready to get to know you both in terms of your finances and what you want to do with them, then work on a personalized plan with you to meet your goals.
A financial advisor is a blanket term rather than a specific professional title. Like many other professionals, such as doctors and attorneys, financial advisors can be highly specialized. Every advisor will know the basics, and some will have overlapping skillsets, but if you need a very specific service, make sure you do your research and find someone with the right expertise. For example, hire an investment advisor if you’re looking to invest in real estate, whereas if you want help preparing for retirement, you should look into financial planners.
Different financial consultants tend to have different payment requirements. Some are paid by commission, which they make by recommending or selling products or services to aid your finances. Others require an hourly fee or a flat rate for consulting. A third common type of fee structure is unique to financial consultants who invest for you. These consultants are paid a percentage of the revenue from any assets of yours that they manage.
There are financial consultants who specialize in many aspects of finance. Do your research and you can find a professional well-versed in your kind of financial situation.