7 Different Types of Financial Advisors and Their Expertise
To function in society, you need money to trade for goods. Our jobs are a way to fund our lives, and the more you make, the more you spend. For some, having additional money left over each month means they can put that hard-earned cash away, so it generates more money. You can invest it on your own or use the advice of a qualified financial advisor.
A financial advisor is trained in debt management, retirement planning, maximizing savings and income, and building their client’s portfolios. Their services are tuned into their client’s financial situations and goals, and they work hard to achieve success. These professionals go by many names, each with their own field of expertise.
There are many avenues to take as a financial advisor. They work with various investments and strategies toward the same goal of financial security for those they represent. Let’s learn about the seven different types of financial advisors and their specialties:
Type #1: Financial Planner
A financial planner is a person who is there to help people meet their short and long-term financial goals. They create strategies for:
- Retirement
- Taxes
- Budgeting
- Investing
- College funds
- Asset location
- Risk management
- Estate planning
- Insurance coverage
- New business
Their goal is to effectively manage the current money situation and needs to maximize their client’s life goals.
Type #2: Personal Banker
A personal banker is an employee at a financial institution that helps customers with various services offered. They are not just tellers who process routine transactions like cashing checks, issuing withdrawals, and receiving deposits.
While these positions are vital to the day-to-day operations of a bank and serve its clients, a personal banker is there for more complex transactions. This includes personal and business loans, getting credit cards and selling other bank products. Personal bankers are well-educated in finance and advise clients on in-house financial services and resolve any issues.
Type #3: Accountant
Accountants are trained professionals that provide financial planning in the form of:
- Inventory accounting
- Auditing financial statements
- Bookkeeping
- Taxes
- Financial transaction reports
They also stay on top of the money going in and out and keep track of cash flow to improve growth while reducing costs to the business. You need them to ensure you comply with all tax laws and regulations to avoid potential financial problems.
Type #4: Debt Counsellor
The role of a debt counsellor is to advise their clients on managing debt, and they specialize in credit and lending services. They take on a financial planner role to work on reducing your debts and negotiate with lenders on your behalf.
Debt councillors also work to boost your credit rating and improve your financial standing while managing the progress of your debt payments. They also offer great strategies for managing future debt and rebuilding your assets.
Type #5: Wealth Manager
A wealth manager is a type of financial advisor who deals with high-net-worth people. Their skills are similar to a financial planner in that they advise on matters like:
- Retirement planning
- Investments
- Insurance
Beyond that, a wealth manager deals with estate and philanthropic planning for those with huge assets. These individuals also have a more complex portfolio and tax considerations that require a robust strategy and creative solutions.
Type #6: Insurance Agent
An insurance agent is another financial advisor who deals with insurance matters. Their goal is to determine their client’s needs and then match them to insurance products.
They sell various products, including:
- Life insurance
- Health insurance
- Disability insurance
- Business and personal asset coverage
They are trained to counsel their clients and advise what insurance needs fit their health, age, and finances. Many also sell mutual funds and securities. For those concerned with estate planning and financial security, an insurance agent or broker will assist you with a sound financial plan to make sure you are covered.
Type #7: Investment Advisor
This financial advisor deals mainly with the management of your investments and advises on a variety of securities, including:
- Stocks
- Bonds
- Mutual funds
- Exchange-traded funds
These types of financial advisors tend to deal with higher-end clients that invest several 100k in their portfolio. They are responsible for market research, gathering and analyzing data, and presenting it to their client. They will consider their people’s tax burdens, assets, yearly income, and age as they help achieve their financial expectations and goals.
Clients can be individuals, families, trusts and family groups, foundations, corporations, private and public pension plans, governments, banking institutions and hedge funds. Your investment advisor will develop a long-term investment plan to achieve your goals and make informed, profitable decisions.