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A financial adviser is a professional who renders consulting services to individuals and households on strategic as well as short-term financial planning, investing and budgeting. Ideally, the financial adviser helps the client maximize their Net Worth by proper Asset Allocation . Most financial advisers receive their remuneration by commission payments on the various financial products that they broker. FINANCIAL PLANNING Retirement One of the major services that financial advisers offer is retirement planning. The financial adviser will typically have great knowledge in the areas of budgeting, forecasting, taxation, asset allocation and financial tools and products in order to establish realistic goals and the strategy by which to reach them. In the United States, this will include the use of several investment tools such as 401(k) /401(k) Roth account(s), Individual Retirement Account s/Roth IRAs, Mutual Funds , Stock s, Bonds and CDs . The financial adviser will determine what percentage of the available income is necessary--when taking into account the tax liabilities, expected inflation and projected return on investment--in order to meet a minimum balance by the client's target age of retirement. This is a fairly straightforward calculation, and there exist many automated tools that do this. The financial adviser's greatest contribution will be that of asset allocation: determining how to maximize the return on investment while satisfying the client's risk tolerance. Investing Because retirement tools enjoying tax benefits, such as deferred wages, will typically have yearly limits on the amount of money that can be deferred, and because the client might have more immediate and mid-term goals, the financial adviser will also assist with meeting these goals by using less risky and more liquid tools. INDEPENDENT ADVISERS IN THE UK Under UK polaristion rules the concept of the Independent Financial Adviser or IFA was born. To be independent of any insurer or other third party interest ensures the client receives unbiased advise. The non-independent advisers are therefore company representatives, and thus may have a conflict of interest. Since 1st December 2004 the Financial Services Authority has introduced a new classification of multi-tied adviser who may represent more than one company. SEE ALSO EXTERNAL LINKS
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