The Investment Advisor role encompasses a comprehensive vision on a variety of financial topics, including investment and guidance. They work with their clients to make investment and allocation decisions, providing unbiased and unrestricted advice and strategies aiming towards helping them achieve their financial goals by building a financial plan. Given that the fee they receive for their services is closely related to the success of their guidance, Investment Advisors will always aim for their clients’ economic development.
The most common workplace for Investment Advisors is in different financial institutions. They may find employment in banks, monetary firms, and in the financial department of big companies. However, some professionals choose to be self-employed and offer their services to individual clients often in matters of personal financing rather than commercial investment.
Here’s a non-exhaustive list of common tasks Investment Advisors are required to complete.
- Establishing business relationships with clients and prospecting, building, and retaining a client base.
- Meeting with customers, analyzing their financial records and identifying their needs:
- Making all the necessary research about the client in order to make the appropriate suggestions and decisions;
- choosing suitable, customized solutions to meet customers’ financial plans and goals with the aim of expanding their portfolio;
- developing investment and trading strategies while ensuring their clients’ best interests are being served;
- promoting financial products and services, as well as their purchase and sale, recommending the best-suited products to their customers;
- providing a professional level of financial based advisory and transactional services to customers, including cash and investments management, insurance coverage, as well as retirement and estate planning; and
- reviewing and giving solutions to clients’ changing needs and financial circumstances.
- Supervising and improving the financial profiles of customers in order to ensure profitability:
- Keeping records of all the financial activities of their customers in order to maintain an updated picture of their monetary status;
- conducting risks analysis;
- researching the marketplace and advising on new and existing products and services; and
- making all the necessary adjustments when the client’s personal or professional life changes.
- Contributing to ongoing professional business development activities:
- Cooperating with the company’s endeavor of achieving a gross revenue and net operating income objectives; and
- working alongside colleagues to gather marketing information, statistics, and trends.
- Staying up-to-date on current investment products, markets, financial trends, law restrictions, and legislations.
- Designing financial strategies and overseeing the financial planning and management of portfolios.
- Researching, gathering, and analyzing data to make effective and profitable decisions on behalf of customers.
- Establishing goals based on the clients’ financial status.
- Evaluating all changes and risks related to their clients’ financial life.
- Monitoring the marketplace and industry trends, as well as their conditions.
- Buying and selling financial products on behalf of their clients.
- Providing education, counseling, and consultation related to investments and finances.
- Building and maintaining their customer base, contacting clients and setting up meetings.
- Keeping detailed computerized records and preparing financial reports.
The average Investment Advisor salary in USA is $33,578 per year or $17 per hour. This is around 1.2 times more than the Median wage of the country. Entry level positions start at $24,000 while most experienced workers make up to $47,000. These results are based on 96 salaries extracted from job descriptions.
- Interpersonal and communication skills:
- Communicating clearly, both in writing and verbally, in order to effectively advise and interact with clients;
- acting with transparency, keeping customers informed about decisions made, and transactions executed;
- displaying strong customer service skills, as well as great listening skills in order to fully understand and meet the clients’ requirements;
- establishing and maintaining supportive working relationships; 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:
- Efficiently and accurately entering and reviewing portfolios’ information into a database; 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
- experience in creating graphics, flow charts, and projections in order to generate statistics.
- Goal-oriented, reliable, flexible, and confident:
- Being self-motivated, highly driven, and having an entrepreneurial personality; and
- being able to work independently.
- High levels of honesty, discretion, and integrity:
- Being trustworthy enough to handle sensitive/confidential information; and
- keeping the client informed, with real, updated information.
Investment Advisors manage their customer’s money and provide advice on their future enterprises. Therefore, they must convey a sense of security and trustworthiness. Possessing good negotiation, communication, and charismatic skills is essential for any Investment Advisor.
Due to the nature of this position’s responsibilities, it is fundamental for Investment Advisors to have strong quantitative and problem-solving skills, as well as a background in Sales, Public Funds, Investment, or Finance. These professionals play a determinant role in the fulfillment of individual financial goals and, therefore, should be capable of determining whether an action represents a risk or an opportunity.
Ethics should prevail in this line of work, hence, disseminating deceitful or fraudulent advice goes against the country’s regulations, established by the Security and Exchange Commission (SEC).
Likewise, Investment Advisors cannot buy and sell securities or make any decisions without the client’s prior consent. Once their customers give their consent, Investment Advisors can be conferred a discretionary authority, which gives them the faculty of acting on behalf of their clients without a prior formal authorization.
In the United States, in order to work in this field, professionals need to decide whether they will get their licenses at the Financial Industry Regulatory Authority (FINRA), in which case, they will become Stockbrokers, while, on the other hand, they could join the Securities and Exchange Commission (SEC) in order to legally become an Investment Advisor.
The goal of any Advisor is to get a license as a Registered Investment Advisor (RIA) issued by the FINRA. In such a scenario, they need to pass the Series 65 exam, which evaluates their knowledge on federal financial laws and investment advice. However, to be able to perform the functions of an Investment Advisor, it is obligatory to be registered in a state level or at the SEC. Those who handle more than $100 million must join the SEC and those who manage a lower quantity must be registered within their state. Companies’ Advisors must register with the SEC.
These practitioners require training in financial management, investing, tax, estate planning, and insurance. In this regard, it is desirable 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, with the proper training and work experience, some employers accept a degree in any field.
Additional credentials are usually required and will vary according to the Investment Advisor’s location and specialization. In the United States, these credentials include, but are not limited to, the following:
- Certified Financial Planner (CFP);
- Chartered Financial Analyst (CFA);
- Chartered Investment Counselor (CIC);
- Chartered Financial Consultant (CFC), and
- Personal Financial Specialist (PFS).
Most Investment Advisor positions require a minimum of 4 years of experience working in client- facing, sales, or relationship-focused roles. Having a vast knowledge of the sector in which the applicant wants to work is always a must.