The term financial advisor is used broadly to identify a wide range of professionals in the finance industry. Even a customer service representative at a bank can be called a financial advisor because they offer advice and information based on the accounts you hold at that institution. These individuals can educate their customers about loans, checking and savings accounts, and other services that the particular institution offers. Here are more examples of the different types of advisors you’ll find in the financial industry.
This typically refers to most bank employees. These professionals can suggest accounts and services based on your financial situation and needs, particularly in recommending savings bonds, CDs, and similar investment options.
Mutual Fund Representatives
Just as the financial institution hires a customer service representative and personal banker, the mutual fund representative is hired by the fund manager. Their role is to sell an interest in the funds, and they earn a commission each time they get an investor to buy into the fund.
These are the people who buy and sell stocks and funds daily, also known as stockbrokers. They typically work for investment firms and earn a commission for each trade they make.
The investment adviser is the professional most people think of in terms of hiring a financial advisor. This is the person who handles your investments, offers financial advice, and helps you formulate a strategy for reaching your investment goals. Typically, each client pays this advisor and is charged a flat fee for specific services, or may have to pay an annual fee to access all of the advisor’s services.
There are subtle differences between an investment adviser and financial planner, although either professional will help you plan for the future. Unlike advisers, the financial planner won’t usually limit their services to wealthier clients. Additionally, there are more options for paying a planner’s fees, so you should find out how your planner prefers to be paid in advance.
Finally, insurance advisors fall into this broad category because obtaining sufficient insurance can protect your finances. An advisor who’s knowledgeable about the various insurance options available to you can help you get the best coverage for your situation. This will help you protect yourself, your family, your property, and your business in an emergency. Since having the right coverage can minimize your out of pocket expenses, this type of advisor also offers valuable services.