Have some extra cash that you want to invest? Not sure where and when? Or how to make use of this money that it returns twofold to you in the future? Imagine having an advisor to guide you what to do with your money.
Well, this isn’t a dream. This is exactly what financial advisors do!
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What does a Financial Advisor do?
A financial advisor is a legally licensed professional who gives consultation to people about their financial situations. People with or without money come to these experts so that they are able to guide them professionally about the best ways of handling their cash.
A financial advisor is responsible for having outstanding knowledge about market trends and the stock market, and must be able to predict future shifts to suit their clients. Moreover, a financial advisor must have a skill to create financial plans for clients, and not just about where and how to invest; these plans should incorporate aspects like savings, budget, tax, insurance and other strategies.
This is everything that a financial advisor does: helps in managing their clients’ financial status and then regularly follows up too. They must be up-to-date with fluctuating market graphs to be able to improvise on strategies that are in the best interest of the client.
Personal financial advisors typically do the following:
- Meet with clients in person to discuss their financial goals
- Explain the types of financial services they provide to potential clients
- Educate clients and answer questions about investment options and potential risks
- Recommend investments to clients or select investments on their behalf
- Help clients plan for specific circumstances, such as education expenses or retirement
- Monitor clients’ accounts and determine if changes are needed to improve financial performance or to accommodate life changes, such as getting married or having children
- Research investment opportunities
How to become a Financial Advisor?
To become a financial advisor, there are a couple of educational and professional requirements. The first step is of course to earn a bachelor’s degree and get proper education, so if you’re enrolled in a recognized college, you’re one step closer to becoming a financial advisor!
It is recommended- but not necessary- to earn a bachelor’s degree in a relevant field that helps in your career as a financial advisor. A degree in Accounting and Finance, or Economics or even Business Studies is great; because they teach you all the theoretical aspects of the market and what to expect when you get in the practical world.
While you’re still at school and still studying, it would be a great opportunity to land an internship during summer break. Working at a financial advice firm or sole practitioner would give you hands-on experience about how to go about it, and what it is like to work under specialists and supervisors. You can take this opportunity to really learn about the profession; ask A LOT of questions!
Once your bachelor’s degree is complete and you also have some internship experience, you probably want to get on with your job hunt! For this, you need to document everything about your experience and qualifications in a resume, so make sure it is precise, relevant and impactful.
To become a specialist as a financial advisor, you obviously need some certificates and licensing to authenticate you as a genuine person. Some common certifications and licenses that financial advisors pursue are:
Once all of this is done, as a financial advisor most people resume back to studying and getting higher education, like a postgraduate degree or even a doctorate. This will help you in staying ahead of quality education and theoretical aspects of your career. When you specialize in one field, like taxes or accounts, it is better to pursue further education in your chosen specialization.
Be sure to keep reading newspapers and watching authentic financial news channels to know how the market is performing- staying up-to-date with current affairs helps you in planning for current marketing strategies and financial plans.
How much does a Financial Advisor make?
By every state, the average salary of a financial advisor varies, in high paying states, the hourly and monthly pay is more than what it is in low paying states.
|State||Annual Salary||Monthly Pay||Weekly Pay||Hourly Wage|
Note: Sample rates have been extracted online, courtesy of ZipRecruiter.
How much does a Financial Advisor cost?
People often ask, ‘Do financial advisors make good money?’ well, yes. Where they are able to help other people solve their financial situations, financial advisors themselves make an impressive amount. And that means they charge a good amount from their clients as well.
Generally, financial advisors charge a flat fee of $1,500 to $2,500 for the one-time creation of a full financial plan, or roughly 1% of assets under management for ongoing portfolio management.
With regards to how much a financial advisor costs, most firms charge expenses dependent on a level of resources under administration (AUM) for progressing portfolio executives. As per a 2018 RIA in a Box study, the normal financial advisor cost is 0.95% of AUM, which for a $1 million record would add up to generally $9,500 every year. (Fees are often assessed quarterly, though, so depending on how your investments are faring, your advisory fees may be more or less.)
Asset-based expenses may diminish as the account amount increases, guaranteeing that high-total assets people are as yet paying a reasonable rate. Notwithstanding, this additionally implies that expenses will be higher for those with lower account esteems. The normal AUM charge for a $50,000 account is 1.18%, or $590 per year, as indicated by a 2017 AdvisoryHQ study.
How much does a Financial Analyst make?
A financial analyst is a person responsible for tracking an organization’s financial performance. They analyze business performance and market conditions to create forecasts, and help senior management make tactical and strategic decisions by providing periodic reports.
The average salary of a financial analyst by state is:
|State Name||Average Salary|
|District of Columbia||$91,390|
Note: Sample rates have been extracted online, courtesy of CareerExplorer.
A financial advisor is a person that gives consultation to clients about how they should be managing their financial situations- like investing their money, looking for insurance, tax proceeds etc.
Usually these people work on a commission basis, especially if they’re working for a company, but mostly they are paid a salary. If they’re an individual entity, they normally charge high fees from their clients and provide services like consultation, creating financial plans, investment strategies, tax proceeds and then following up on all plans.
To become a financial advisor, you need to make sure you have all the educational qualifications and legal certificates to license you as a genuine advisor. The best way is to gain educational and professional experience through internships and working under the supervision of financial experts.