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You’ve probably heard of the term financial consultant and you may be wondering what these professionals do. In general, they help you build wealth by designing the best strategy to achieve your goals based on your current financial situation. This includes everything from managing your investments to meeting your retirement goals.

Keep reading to learn more about what a financial advisor is, their roles, signs you may need to hire one, and tips for choosing the right one for your needs.

What is a Financial Advisor?

The term “financial consultant” is a somewhat outdated title that has been replaced by “financial advisor” in most financial services companies. A consultant can work with individuals or companies. They help on a wide range of topics, including financial planning, investment management, tax planning, and retirement.

Simply put, a financial advisor will help you achieve your financial goals by offering advice on building wealth. For example, if you want to save for retirement and aren’t sure how, a consultant will recommend the right type of retirement account and how much to save.

Depending on their background and level of certification, a financial advisor may cater to more specialized needs such as tax planning, insurance, and estate planning. They can also help you identify the best investments based on your risk tolerance and goals.

Roles of a Financial Advisor

A financial advisor will review your current financial health, including your assets, investments, income, and debts. They will then sit down with you and develop a strategy to achieve your short and long term financial goals.

The type of service you receive from a financial advisor depends on the guy you hire. If you’re looking for a consultant, you might want to consider these three options:

Financial advisor options

  • Robo-advisors. If you prefer a hands-off approach to investing, a robo-advisor will help you manage your portfolio based on your risk tolerance and goals. On the plus side, robo-advisors offer inexpensive portfolio management and some offer financial planning services.
  • Traditional financial advisers. Unlike robo-advisors, a traditional financial consultant can be quite expensive because they use a personalized approach to provide a wide range of planning options. As your needs change, a traditional financial advisor will guide you in making sound decisions based on your finances.
  • Online Financial Advisors. These professionals offer financial planning services online and are therefore suitable for people who do not wish to hire a full-service consultant.

Difference Between a Financial Advisor and a Financial Advisor

Financial consultant and financial adviser are two terms that are often used interchangeably in the financial services industry. Both offer financial planning services, and the only key difference is the length of the relationships they have with clients.

Financial consultants deal with specific issues within a given timeframe, and once the client’s issue is taken care of, the two parties follow different paths. Financial advisors, on the other hand, work with a business or individual for the long term.

Consultants and advisers may have studied finance, economics, or accounting, but certification levels may vary. Many of them hold designations such as Chartered Financial Advisor, Chartered Financial Analyst, Chartered Public Accountant, or Certified Financial Planner.

Signs you might need a financial advisor

Hiring a financial advisor or consultant can seem daunting, but doing without involves many risks. If you can’t decide whether to hire a consultant, here are some reasons to consider it:

You have trouble setting your budget

Following a budget will ensure that you keep track of all your expenses to achieve your financial goals. But if your previous budgeting has failed several times, you may need a professional to help you. There are many reasons why people fail at budgeting – a financial consultant can help you create a budget you can stick to.

You have trouble paying your debts

Many people have debt, whether it’s a student loan, car loan or mortgage. If you’re drowning in debt to the point that consolidating your debt is becoming a burden, it’s time to hire qualified staff. A financial advisor can help you put a repayment plan in place to pay off your debts in a manageable way.

You are ready to invest

Investing is a great way to build wealth. But if you don’t have a solid investment plan, it can be daunting. Depending on your short-term and long-term investment goals, a financial advisor can develop a strategy to help you become a great investor.

You have no idea about retirement

If you have no idea how much to save for retirement or which retirement account to choose, it would be a good idea to consult a financial advisor. They will guide you through different savings options based on your retirement goals.

How to choose a financial adviser

Here are some factors to consider when looking for the best financial advisor:


Financial advisors come from different backgrounds and offer a variety of services. As mentioned earlier, some of the more common designations include ChFC, CFA, CPA, CFP, and Financial Industry Regulatory Authority licenses such as Series 7 and 66. Knowing their credentials will give insight into their areas of specialty and experience. .

Fiduciary duty

A fiduciary duty means that an advisor must act according to the needs of the client and not according to their personal interests. To receive the best services, your wisest bet is to choose a consultant who upholds fiduciary duty.

Fee structure

Another crucial factor to consider is the cost of a financial consultant. These professionals are remunerated as follows:

  • Commission based. Some consultants work on commission for the products they sell to clients.
  • Paid. Financial advisors who receive only fees may charge an hourly or fixed rate, which may vary depending on the parties’ agreement.
  • Combination of fees and commissions. Some consultants prefer to be paid by a combination of fees and commissions.

The essential

Your financial situation will determine whether you need a financial advisor or not. These professionals can help you achieve your financial goals based on your current situation. However, before entering into a relationship with them, be sure to double-check their designations.

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About the Author

Lydia Kibet has been writing professionally since 2017. Her passion for helping brands with all aspects of content marketing shines through in the expert industry coverage she provides – personal finance, investing and healthcare. His work has been featured in The Motley Fool, Investor Junkie, Green Market Report and Medical News Today. When she’s not writing, she’s reading, playing guitar or catching up with nature. Follow her on Twitter.