Financial Advisor Meaning: Understanding the Role in Plain English

Managing money isn’t easy—especially when everyone seems to have conflicting advice. That’s where Certified Financial Advisors (CFAs) come in. Whether it’s planning your dream retirement, managing investments, or securing your child’s education, these experts use their knowledge and experience to help you achieve your financial goals.

Think of them as the GPS for your finances—assessing your current position, charting the best route, and guiding you to your destination safely and efficiently. Curious to know who they are and what they do? Let’s dive in!

Roles and Responsibilities of a Financial Advisor

1. Financial Planning: Perhaps the most important role of a financial advisor is to assess the financial position of their clients, create short-term and long-term goals based on the same, and create a roadmap to achieve the same.
2. Retirement Planning: To ensure that their clients have a safe and secure retirement, financial advisors can advise on the best investment options, healthcare insurance, recurrent accounts with good interest, and so on.
3. Tax Planning: A financial advisor must also ensure that their clients abide by the tax laws of the land while employing tax savings strategies that work within the legal realm. Thus, financial advisors need to be well-versed in the changing tax laws.
4. Estate Planning: If a client wants to pass on their estate to family, or relatives, or do philanthropy to NGOs or religious institutions, a financial advisor can help them with a smooth transformation for the benefit of both parties in the exchange.
5. Educating the Client: The role of a financial advisor is not limited to merely advising on the best financial investment but also empowering them to make informed decisions with their money. Thus, it’s necessary to educate them about financial terms and concepts how to invest, and so on.
6. Ethical Responsibility: Apart from fulfilling their primary duty of helping their clients achieve their financial goals, financial advisors must also fulfil their fiduciary duty. Simply put, they are required to keep their client’s interests over and above theirs.
7. Investment Advisory: since financial advisors also execute investment strategies on their client’s behalf, they do so with one objective in mind, that is, minimise risk and maximise profits. To do so, they may diversify your portfolio, invest in assets with maximum benefits and take risks.
8. Debt Management: Managing their client’s debts, streamlining the repayment process and avoiding future loans are also a few key roles of a financial advisor.
9. Budget Assistance: Budgeting is an important life skill. However, we often fail to create foolproof budgets that can help us fulfil our needs and wants while also securing our future. Thus, financial advisors are needed to help us efficiently budget our expenses.

Qualifications of a Certified Financial Advisor

• CFP

Financial Advisors are mostly Certified Financial Planners (CFPs). Simply put, they are professionals with in-depth knowledge and expertise in financial planning. Their proficiency is tested and vouched by the Financial Planning Standard Boards (FPSB) India, the subsidiary of FPSB Ltd., USA. Also, since they do extensive research and have hands-on experience in managing portfolios, they “know” what they’re saying, unlike run-of-the-mill finance influencers on the Internet.

The best part is that you don’t need fancy qualifications or finance industry experience before taking the CFP course in India. All you need is a minimum of 55% marks in your 12th standard examinations, an ardent interest in the field and a curiosity to learn! The average course duration of CFP course is 6-18 months. Check out our step-by-step guide to CFP certification in India.

• CFA

If you’re a graduate (from any discipline) and willing to make a career in investment banking, portfolio management, wealth management, financial analysis, etc., then the Chartered Financial Analyst (CFA) program is for you. CFA is one of the globally renowned financial certifications.

Being administered by the CFA Institute, U.S., the course focuses on investment management, financial analysis, and ethical practices. Moreover, the CFA charter is considered the gold standard in the finance and investment industry. Financial advisors with CFA are more likely to get better employment and promotion prospects.

How to Choose a Financial Advisor

When you’re looking for a financial advisor, look out for the following things and you will be well on your way to securing a financial advisor that understands your needs and aspirations.

1. Qualification: A good financial advisor always has solid educational qualifications like CFP or CFA. Thus, ask for their certifications and any add-on courses they might have done. This will showcase their credibility. Moreover, do not be swayed by just certificates and keep an eye on the functional literacy and awareness of the person in question.
2. Experience and Fees: The more seasoned a financial advisor is, the higher would be his/her fees. Although experience is important, it is not always the best determinant for selecting a candidate. It would be wise to check their asset allocation techniques, their knowledge, and clientele. Brownie points if the financial advisor you choose is a fiduciary advisor.
3. Personality: It is very important to have a financial advisor who shows an interest in understanding your financial goals and aspirations. Thus, have a meeting with them,  explain your goals and see how they respond. Advisors who simplify things for you, and advise without pushing you to take action are gems as they are not focused on simply selling their services but want the best for you. Moreover, the best advisor is the one who does not shy away from educating and empowering their clients.
4. References: Ask for people who vouch for their services and how long and in what capacity they were associated with them. Contact them and get to know more about the person.

How Can Proschool Help You Become a Great Financial Advisor?

At Proschool, we have trained 5,000+ financial advisor aspirants over the last 5 years. The majority of them are CFPs and CFAs. Our faculty members are industry veterans who use hands-on training techniques, and real-world case studies to engage students.

Our CFA course includes both online and classroom lectures. We provide 250+ hours of training and 2000 practice questions for each of the CFA levels to help our students build the right skills for the exam.

For the CFP course, you can enrol with us and save $250 on FPSB’s study materials.Our average passing rate is 70%.

Bottom Line

A Certified Financial Advisor plays a crucial role in moulding the financial future of their clients. With the perfect blend of qualifications, certifications, and ethical practices, they guide individuals and businesses through the twists and turns of financial planning, investments, budgeting, debt management and more.

FAQs

Who is called a financial advisor?

A financial advisor is a professional who helps individuals and businesses manage their money, plan investments, save taxes, and achieve financial goals like retirement or wealth creation.

Does a financial advisor make money?

Yes, financial advisors earn through commissions, flat fees, or a percentage of the assets they manage for clients. Their income can range from ₹3-10 lakhs annually for entry-level advisors to ₹15-30 lakhs for experienced ones.

What is a financial advisor’s job description?

A financial advisor’s job includes financial planning, investment management, tax-saving strategies, debt repayment guidance, and creating customized plans to help clients achieve financial stability and growth.

Is financial advisory a good career?

Yes, it’s a promising career with high demand, strong earning potential, and the satisfaction of helping others achieve financial security. However, it requires continuous learning and building trust with clients.

Can I become a financial advisor without a degree?

Yes, you can become a financial advisor with certifications like CFP even without a degree. Strong analytical skills and knowledge of financial products are key.

Financial Advisor vs Financial Planner: What’s the Difference?

A financial advisor offers general guidance on investments, taxes, and wealth management, while a financial planner focuses on creating a detailed plan for long-term financial goals like retirement or education funding.