Financial Advisor


DEFINITION of 'Financial Advisor'

One who provides financial advice or guidance to customers for compensation. Financial advisors (or advisers) can provide many different services, such as investment management, income tax preparation and estate planning. They must carry the Series 65 license in order to conduct business with the public. A wide variety of licenses are available for the services that a financial advisor can provide.


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BREAKING DOWN 'Financial Advisor'

'Financial advisor' is a generic term with no precise industry definition, and many different types of financial professionals fall into this general category. Stockbrokers, insurance agents, tax preparers, investment managers and financial planners are all members of this group. Estate planners and bankers may fall under this umbrella, as well.

The Investment Advisers Act of 1940, a U.S. federal law, was enacted to regulate the actions of investment advisers/advisors. Advisors are administered by the Securities and Exchange Commission.

  1. Fiduciary

    1. A person legally appointed and authorized to hold assets in ...
  2. Series 65

    A securities license required by most U.S. states for individuals ...
  3. Asset Allocation

    An investment strategy that aims to balance risk and reward by ...
  4. Investment Advisor

    As defined by the Investment Advisors Act of 1940, any person ...
  5. Financial Planner

    A qualified investment professional who helps individuals and ...
  6. Certified Financial Planner - CFP

    The CFP legal team has provided its official definition, along ...
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  1. Do financial advisors prepare tax returns for clients?

    Financial advisors engage in a wide variety of financial areas, including tax return preparation and tax planning for their ... Read Full Answer >>
  2. Do financial advisors have to find their own clients?

    Nearly all financial advisors, particularly when new to the field, have to find their own clients. An employer may provide ... Read Full Answer >>
  3. Do financial advisors get drug tested?

    Financial advisors are not drug tested by any federal or state regulatory body. This means you may receive your Series 6, ... Read Full Answer >>
  4. Do financial advisors have to be licensed?

    Financial advisors must possess various securities licenses in order to sell investment products. The specific products an ... Read Full Answer >>
  5. Do financial advisors have a base salary?

    Many financial advisors get paid a base salary plus any performance-based bonuses they may have earned that year. However, ... Read Full Answer >>
  6. What fees do financial advisors charge?

    Financial advisors who operate as fee-only planners charge a percentage, usually 1 to 2%, of a client's net assets. For a ... Read Full Answer >>
  7. Do financial advisors need to meet quotas?

    Most financial advisors are required to meet quotas, particularly if they work for firms that pay base salaries or draws ... Read Full Answer >>
  8. Do financial advisors need to be approved by FINRA?

    The term "financial advisor" can refer to a couple of different roles. It most often refers to a broker-dealer or an investment ... Read Full Answer >>
  9. Does a financial advisor need an MBA?

    Obtaining a license as a financial adviser does not require an Master's of Business Administration (MBA) degree. The Certified ... Read Full Answer >>
  10. Do financial advisors work only in banks?

    While the majority of financial advisors work for financial institutions such as banks, a large proportion of them are self-employed ... Read Full Answer >>
  11. Is it better to buy A-shares or a no-load mutual fund?

    Mutual funds and other pooled investments are popular among investors because they provide a level of diversity and professional ... Read Full Answer >>
  12. How do I get started with a career in asset management?

    The asset management industry has a variety of different career paths. Depending on what asset management area you would ... Read Full Answer >>
  13. How are contingent beneficiaries informed of a payout?

    One of the greatest tools in estate planning is beneficiary designation. Listing primary and contingent beneficiaries is ... Read Full Answer >>
  14. What is private wealth management?

    Private wealth management is an investment advisory practice that incorporates financial planning, portfolio management and ... Read Full Answer >>
  15. How does price elasticity affect my stock purchase decisions?

    The person who handles a corporation's short-term investments varies depending on the size of the company, the corporate ... Read Full Answer >>
  16. Why is it important for a financial advisor to have a unique value proposition?

    It's important for a financial adviser to have a unique value proposition for the same reason that it's important for any ... Read Full Answer >>
  17. What distinguishes the financial services sector from the banks?

    Banking is a subset of the financial services sector, although not all bank services are strictly defined as financial services. ... Read Full Answer >>
  18. What is the financial services sector?

    Broadly speaking, companies that operate in the financial services industry are in the business of managing money. In the ... Read Full Answer >>
  19. Why would an investor opt for a partial redemption as opposed to a full redemption?

    A partial redemption occurs when an investor liquidates some, but not all, of a security's value. For example, suppose an ... Read Full Answer >>
  20. What's the average salary of a financial advisor?

    A financial advisor is a professional who is engaged in the business of advising clients about financial matters. "Financial ... Read Full Answer >>
  21. What's the difference between a financial advisor and a financial planner?

    A financial advisor can be a financial planner. However, the term is not limited to financial planning in and of itself. ... Read Full Answer >>
  22. What's the difference between a CFA and a CPA?

    There is understandable confusion between different financial professionals and their designations. The difference between ... Read Full Answer >>
  23. How quickly should my financial advisor sell a stock that I have asked him or her ...

    Financial advisors and planners have fiduciary responsibilities to their investors. They owe their investors a high degree ... Read Full Answer >>
  24. The de Minimis clause for investment advisers means:

    A. An investment adviser must register with the state if it holds less than $25 million in assets. B. An investment adviser ... Read Full Answer >>
  25. Investment advisors must register with the SEC when their assets under management ...

    A. More than $20 millionB. More than $25 millionC. $25 million to $30 millionD. More than $30 million Correct ... Read Full Answer >>

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