What Are Financial Advisors and How Do They Work?

Financial advisors

A financial advisor or financial planner is an individual who offers financial advice to clients according to their financial position. In most countries, financial advisors are required to complete certain formal training and also be formally registered with a regulatory agency in order to give professional advice. However, a lot of people tend to refer to financial advisors as financial planners even though they are not regulated by a regulatory authority. In fact, there are no regulatory standards or laws that regulate advisors to give professional advice. Financial advisors are not required to meet special examinations before they can practice. In some countries, financial advisors are required to hold specific licenses even if they do not hold a professional license. Resource


Financial advisors are often the point of contact for people who want to take a look at their finances. For example, an advisor can help a person set up a savings plan, help them find a mortgage and negotiate terms on loans. There are also other specialized areas of financial planning such as estate planning and investing, which requires the expertise of a financial advisor who has a legal and financial background in wealth management. Some people refer to financial advisors as wealth managers whereas, others believe that a wealth manager is someone who manages an individual’s wealth. In some countries, financial advisors may work directly for banks or brokerage houses while some work independently.


Apart, from advising and helping people achieve their health goals, financial advisors play an important role in managing their finances as well. They assist their clients in creating an efficient budget that helps them meet their finances. An effective budget helps clients in understanding how they spend their money and helps them change their spending habits. This enables them to live a debt-free lifestyle.

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