What Does A Financial Advisor Do?

05/05/2014 17:15

To make your financial plans very effective, you certainly require a financial advisor. Now, this is where an associated question comes in - what does a financial advisor do? There is a globally recognized & accepted 6-step process, which financial advisors follow while meeting a client. This is what they do. Let me explain you through this article.

What Do Financial Advisors Do?

Their Financial Planning procedure involves of these 6 steps:

1. Establish & define client-advisor relationship

Now, this step is just the beginning of a meet. In places like New Zealand, there is a mandatory requirement for you providing with advisor’s disclosure statement. It covers qualifications, experience, advisor’s payment & relationships with the product providers. In this phase, a financial advisor requires explaining about his services offered properly.

2. Gather the client data with goals & objectives

Here, a financial planner needs finding out as to where you financially stand currently, what the present situation is & he or she will ask regarding some information on financial circumstances. On the other hand, you will also be asked about your financial objectives, time limit, risks, income and tolerance.

3. Analyze & evaluate

In this phase, the info provided by you to the advisor will be clearly analyzed with your present situation.

4. Develop & present recommendations

Your financial planner or advisor prepares a well written plan showing recommendations, which address your objectives based on information you provided. Now, your advisor to you in further meetings must explain these recommendations.

5. Implementation

If you are 100% satisfied with prepared recommendations, your financial advisor begins to implement it in your practical life. Meanwhile, you will have to often coordinate in order to carry out all the process properly.

 6. Monitoring

In this stage, usual reviews are suggested, at least in annual basis. On the other hand, you require deciding as to how frequently it will be appropriate.