Financial Advisors or Broker Advisors deliver personalized investment solutions to their clients. They are considered planners since they help people reach their financial goals by establishing a strategy. Financial Advisors execute orders on the stock market and sell financial products (e.g. stocks, treasury bills, mutual funds, annuities, and variable life insurance), and manage other financial activities on behalf of clients in exchange for a commission.
Financial Advisors sometimes offer counseling, guidance, and consulting services. However, these services are mainly focused on a transaction-based relationship, since the Financial Advisor stands as an intermediary between a buyer and a seller and must set transactions that are suitable for both parties.
These professionals can also be perceived as educators, as they teach their clients everything they need to know regarding their finances and how to take advantage of the capital they have in order to achieve their future plans, as they save and invest money.
This position is easily confused with the one of Investment Advisor, whose role is to offer a more comprehensive vision on a variety of financial topics, including investment and guidance. Investment Advisors work in conjunction with their clients to make investments and allocation decisions, providing them unbiased and unrestricted advice.
Financial Advisors are commonly hired by investment companies, stock brokerage firms, stock and commodity exchanges, building societies, financial planning firms, independent financial advice companies, insurance companies, and a number of retailers who offer financial services.
Here’s a non-exhaustive list of common tasks Financial Advisors are required to complete.
- Providing a professional level of financial-based advisory and transactional services to customers based on their assets:
- Meeting with clients on a regular basis;
- identifying clients’ needs and goals and assessing their current and future investment actions;
- buying and selling financial products such as stocks, commodity futures, foreign currencies, among others, on behalf of investment dealers and other clients;
- developing investment and trading strategies while ensuring their clients’ best interests are being served;
- recommending the best-suited products to their customers;
- promoting financial products and services;
- providing education, counseling, and consultation related to investments and finances; and
- keeping clients’ goals and needs as priorities.
- Maintaining detailed records of the transactions executed and decisions made:
- Following up on customers’ investment portfolios to ensure that every transaction is being held pursuant to industry’s regulations;
- keeping clients informed of any transaction or decision made; and
- keeping a log with updated information about each of their clients.
- Establishing business relationships with clients:
- Maintaining a record of potential customers and transactions.
- Searching for opportunities to access and build new brokerage markets and products:
- Keeping up-to-date on legal and financial issues related to their field;
- coordinating, conducting, and executing daily, weekly, and quarterly research on market trends and other related topics; and
- completing market surveys, data and cash flow analysis, financial modeling, and other deliverables.
- Contributing to ongoing professional business development activities:
- Cooperating with the company’s endeavor of achieving gross revenue and net operating income objectives;
- attending courses and classes to improve their skills and offer an outstanding service; and
- working in conjunction with colleagues to gather market information, statistics, and trends.
- Following all regulations, rules, and restrictions established by the law and the industry.
- Contacting clients and setting up meetings.
- Reviewing customers’ financial status, as well as their current and future aims.
- Designing financial strategies.
- Buying and selling financial products on behalf of their clients.
- Selling securities by making bids and offers.
- Researching the marketplace and monitoring its conditions.
- Designing financial plans using the information available.
- Looking for new clients and prospects.
- Keeping detailed computerized records and writing reports.
The average Financial Advisor salary in USA is $52,262 per year or $27 per hour. This is around 1.8 times more than the Median wage of the country. Entry level positions start at $37,000 while most experienced workers make up to $73,000. These results are based on 450 salaries extracted from job descriptions.
- Interpersonal and communication skills:
- Communicating clearly, using a simple, non-complex language, both in writing and verbally, in order to effectively advise and interact with clients;
- displaying strong customer service skills combined with great listening skills in order to fully understand and meet the clients’ requirements;
- acting with transparency, keeping customers informed about decisions made and transactions executed;
- establishing and maintaining supportive working relationships;
- being discreet regarding clients’ personal and financial information; and
- being able to deal with team members and customers in potentially adversarial situations using a calm, tactful, discreet, and effective approach.
- Organizational and time management skills:
- Prioritizing and planning work activities in order to manage time efficiently while handling a high volume of work; and
- multitasking; being able to work in a dynamic, fast-paced environment.
- Analytical, problem-solving, and decision-making skills:
- Effectively analyzing numerical data, drawing logical inferences, and providing reasonable recommendations;
- identifying issues and resolving problems in a timely manner; and
- being able to exercise strategical thinking and mature judgment.
- Strong attention to detail:
- Entering and reviewing data efficiently and accurately; and
- staying focused during highly repetitive tasks.
- Administrative skills:
- Demonstrated computer proficiency in Microsoft Office Suite, including the ability to develop and use formulas; and
- being experienced in creating graphics, flow charts, and projections in order to generate statistics.
- Goal-oriented, reliable, flexible, and confident:
- Being self-motivated, determined, influential, highly driven, and having an entrepreneurial personality; and
- being able to work independently.
Due to the nature of this position’s responsibilities, it is fundamental for Financial Advisors to have strong quantitative and problem-solving skills, as well as a background in Sales, Public Funds, Investments, and Finances. These practitioners play a determinant role in customers’ endeavors of fulfilling their financial goals and therefore should be capable of determining risk tolerance to identify when an action might represent a risk.
Most Financial Advisors are usually required to have completed a bachelor’s degree in Accounting, Global Business, Finance, Business Administration, or Economy, or to have obtained any other equivalent certification. However, senior positions demand applicants to have a master’s degree.
Investment companies usually offer training programs and courses to better prepare workers and give them the tools to pass the necessary examinations and get their certifications. Financial Advisors aren’t able to offer their services without these certifications, as they need to be endorsed byThe Financial Industry Regulatory Authority (FINRA) or to be legally registered with The Securities and Exchange Commission (SEC).
Additional credentials are usually required and will vary according to the Financial Advisor’s location and specialization. In the United States, these certifications include, but are not limited to, the following:
- Certified Financial Planner (CFP);
- Registered Investment Advisor (RIA);
- Personal Financial Specialist (PFS);
- Chartered Financial Consultant (CFC); and
- Chartered Financial Analyst (CFA).
Advisors working in financial areas, such as insurance, stocks, and investment, also need to be licensed in the specific state where they aim to offer their services. Applicants can find all the necessary requirements and information in the Directory of Securities Laws & Regulations from the North American Securities Administrators Association (NASAA).
Additionally, if Financial Advisors administer and supervise their clients’ assets and finance, it is obligatory to be part of the state or The U.S. Securities and Exchange Commission (SEC), as they need to be legally allowed to do so.
Most Financial Advisors or Broker Advisors positions require between 2 and 3 years of experience in the Financial field. Having a basic knowledge of the sector in which the applicant wants to work is always a must.