The figure of the financial adviser is acquiring increasingly high importance mainly due to the appearance of new products and services of a financial nature and their complexity. But what is a financial advisor? What functions does it have? Is accreditation needed to carry out its work? The following sections will delve into its development and analyze its most important characteristics.
Concept: Financial Adviser
Before delving into the main aspects that a financial advisor must meet, we must consider its definition. In this case, we understand a “financial advisor” to be a professional with advanced knowledge of finance, specifically about financial products and their derived taxation. Its main objective is to help customers get the product that best suits their situation and needs.
In other words, its purpose is to find a solution that suits investors and provides them with optimal solutions according to their risk profile, their economic balance, their age, etc.
Features By Type
Mainly, the functions of a financial advisor can be differentiated, depending on whether they work for a bank or a company:
In the case of a banking entity, its main function will be to manage the bank’s funds and find new business opportunities. In turn, it will provide advice to clients of the same entity to offer them certain investment products.
On the other hand, if we do not refer to a financial advisor in a company, some of the functions that he will face are focused on helping the company make investment decisions, new ways to increase the organization’s value, and providing advice for the daily management.
As an alternative, there is also the independent financial adviser, whose difference is that he does not take a commission for the products he sells since it is the client himself, to whom he provides service, who proceeds to hire him and pay him for the advisory service.
In general, the functions of the financial advisor are going to be summarized in the following:
- Analysis of the investor client profile.
- Advice on investment matters for the correct decision making.
- Carry out a market study on the current situation.
- Ability to offer the best products according to the investor’s risk profile.
- Achieve the achievement established for each client.
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Financial Advisor vs Financial Agent
It is important, in this sense, not to confuse the concept of “financial advisor” with that of “financial agent”. The main difference is that the financial agent offers a vision that focuses on a more macro view of the economy. The function is closer to that of a consultant for a specific moment. On the other hand, the advisor focuses on more continuous monitoring of the investment client’s objectives and management.
Characteristics of The Financial Advisor
The main characteristics that the financial advisor must have are the following:
- Accreditation: For the correct performance of a financial advisor, they must have a high level of knowledge in the area of taxation and financial management and an official certification, which proves their situation. In this case, the CNMV provides a list of the certifying companies where INESEM is located.
- At the disposal of the investor: Another aspect to take into account is the constant communication between the client and the advisor to be able to resolve the different queries.
- Trust: Another characteristic to consider focuses on trust and communication so that the evolution of the business relationship is effective.
- The objective in his decisions: The financial advisor must be objective concerning the investor to offer him the products that best suit his needs.
It is important to remember that the financial advisor is the objective not to sell a financial product. Still, through his knowledge of the financial and tax field, he can help the investor make more effective decisions to select an investment financial product. That is, select those that best suit the investor’s situation.