Financial advisory is the service provided by a professional who helps your client to deal with your finances and advises you on your investments. This service is also part of reporting on economic trends, changes in legislation and associated risks.
It is up to the financial advisor (called the financial advisor or financial adviser, in English) to present all the information safely to the client. In addition, he must clear all doubts so that he can make his decisions consciously.
How does the work of a personal financial advisor work?
Financial consulting begins with a meeting between consultant and client. In it, the financial adviser’s first step is to assess the client’s needs and help him plan his short, medium and long term goals.
In the short term, a personal financial advisor can assess your client’s accounts to identify where changes are needed to accommodate a life change, as in the case of the birth of a child.
Outlining a strategy for a peaceful retirement is the kind of help that the consultant can give thinking about the long term.
After identifying your client’s goals and needs, the financial advisor will be able to recommend the most appropriate combination of investments for him.
It is at this stage that the consultant’s educator role is important. He should pass on as much information as possible about investment options, their advantages and risks, and the current economic situation.
In addition to dealing with investment recommendations, financial advisors can also advise on taxes, insurance and personal finance control. In this way, it is possible that your customers will be able to separate a portion of their budgets to invest.
A consultant’s job does not end when setting up the financial plan. Ideally, new meetings should take place to monitor the results of the client’s investments, the status of their accounts and suggest changes, if necessary.
Adjustments are essential because both the circumstances of the economy and the customer’s own goals may change. That is why it is important that the client and consultant meet at least once a year to reassess the planning done.
Business financial consulting
Some financial consultancies are specialized in working with companies. Usually, a company hires an external financial advisor when it needs to solve a specific problem.
This consultant who will diagnose the situation, evaluate the possible solutions to the problem and help with its implementation. In other words, as with personal counseling in companies, financial consulting also usually develops in three stages: diagnosis and planning, execution and monitoring.
In the case of micro and small companies, financial consulting can be very useful to clarify the doubts of the business administrator, who is often not a professional financial manager. The consultant can help to improve the management structure, creating mechanisms so that all transactions are correctly accounted for.
This will allow the company to have greater financial control and a better analysis of its cash flow, knowing how to identify the deficiencies that prevent it from making a greater profit.
Currently, personal and business financial advice can be offered in a coaching process. In this case Coach and Client will establish strategies through periodic meetings to work on financial goals.