What is Financial Advisor? Definition of Financial Advisor, Financial Advisor Meaning and Concept

What is Financial Advisor? Definition of Financial Advisor, Financial Advisor Meaning and Concept - A financial advisor is the person who establishes a relationship with the client, both in investment decisions and in those related to operations. The client-advisor relationship is the basis of good…

A financial advisor is the person who establishes a relationship with the client, both in investment decisions and in those related to operations.


The client-advisor relationship is the basis of good financial advice where the client is the one who has the last word. In this type of advice, financial institutions use so-called global management products such as funds of funds ( ETFs ) or profiled funds, where the role of the advisor is to determine the client's risk profile, that is, to make a good customer profiling.


It is key to being a good financial advisor to have a solid financial base, which will allow, after obtaining a large amount of information through multiple channels, to transmit it to the client with precision, speed and in a clear and simple way.


With such a quantity of information, the advisor must be able to anticipate the competition and the information that the client has, recommending the products that best suit the client and offer adequate fiscal-financial profitability.


Requirements to be a good financial advisor


Financial advisers must have very specific qualifications when it comes to training. The training required to be an expert financial advisor is divided into three broad categories:

  • Financial: The solid financial base required to advise clients has to do with financial mathematics, statistics and variables that may affect the behavior of assets (in general financial markets) such as trend or macroeconomic indicators. They also need to understand the main markets for equities, bonds, derivatives and currencies.
  • Tax: The advisor must know the tax framework in force, as well as the taxes that have to be paid in that country or in other countries if he is an international client. Therefore, you must know the personal income tax, inheritance tax, corporation tax, etc. With all this, the advisor must be able to carry out tax planning taking into account a multitude of client variables.
  • Legal: Although in many cases the entities have specific departments that provide support to the advisers, it does not escape that they have adequate training in this regard because he will be the one who mediates between the Legal Advisory and the client. You must know, for example, issues related to SICAVS or the constitution of patrimonial structures.

There are professional accreditations at the European level where they prepare you to be a good financial advisor, such as the EFPA (European Financial Planning Association) program, where they prepare you for the EFA (European Financial Advisor) and EFP (European Financial Planner) accreditation.


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