The financial advisor is often a misunderstood figure. In this article, we’ll explain who they are, what they do, and how you can become one.
Professional paid to offer financial advice to his clients, but who and what does the financial advisor do? Below we will see together what his tasks, objectives, and duties are. Not only that, we will also understand what the requirements are to practice this profession and where a financial manager usually works.
Who is a financial advisor: general information about the profession
The financial advisor studies the financial markets and offers advice on the best investment alternatives to his clients. Not only that, they explain to them the advantages, costs, and risks of each alternative proposed by the various credit institutions, banks, or real estate brokerage companies. It helps to create a financial plan, taking into account your economic conditions and the goals you want to achieve in both the short and long term. In particular, it can provide useful advice to put into practice in daily life to manage savings better and make them profitable.
Financial, banking, and economic consultant: are they the same person?
According to the commutative property of addition, if we change the order of the addends the result does not change. A concept that is also valid for the term financial, banking, and economic consultant. Despite changing the name, the modus operandi is the same.
The term financial, economic, and banking consultant always refers to an expert in finance and related legal and fiscal aspects, with an eye to the world of investment services and capital management operations.
What does the financial advisor do, including tasks, tasks, and objectives
The financial manager must guarantee its customers a transparent and continuous service. To this end, it is essential that during the first meetings, he clearly explains what his task will be, and the necessary documentation, and guarantees constant assistance. Only in this way is it possible to create a bond of trust that must also continue after the sale. Not only that, the financial advisor must act ethically and responsibly, always providing updated information and constant support.
The main objective of a financial assistant is to provide impartial advice that takes into account the client’s individual needs and conditions, without prejudice to the fact that the market is constantly evolving. To this end, the professional first meets the client to define together the objectives they wish to achieve.
Going into detail, the main tasks include:
- in-depth analysis of the customer’s situation from an economic and financial point of view;
- study of alternatives available on the market such as loans, savings plans, and investments;
- management of documentation and related administrative and bureaucratic obligations;
- constant support to the customer and monitoring of the progress of the case;
- retention and acquisition of new customers.
How to become a financial advisor? The requirements necessary to practice the profession
To practice the profession of financial advisor it is important to possess certain knowledge in the economic and financial field. Not only that, it is essential to pass an exam to enroll in the relevant professional register and always stay up to date. Here, then, is the path to follow to carry out this activity.
Degree and training course
To become a financial advisor it is sufficient to have obtained a education qualification not lower than an upper secondary education diploma. Obtaining a degree is not essential, but strongly recommended. In particular, it may be useful to possess certain degree qualifications, such as in Economics and Finance, Business Management and Accounting.
Thanks to these study courses it is possible to acquire the necessary knowledge in accounting and budgeting, microeconomics, macroeconomics, financial mathematics, and statistics. This knowledge is fundamental to better plan investments, manage financial operations and monitor market trends.
Specific courses, competitions and exams
The first step to take to start working as a financial consultant is to pass the exam of the Supervisory Body and maintainer of the single register of Financial Consultants. This test is announced annually by the OCF and is carried out with various sessions and exams which take place monthly, except for January and August. Specifically, it is a theoretical-practical exam in the form of a quiz with 60 multiple-choice questions to be answered within 85 minutes. The tests are administered after random extraction from a question database, guaranteeing each test the same level of difficulty for each candidate.
The subjects examined include financial market law, private and commercial law, mathematics, financial economics, social security, and insurance law. To register for the test you must send your application to the relevant territorial sections taking into account the methods indicated in the announcement. Once you have passed the exam it is possible to register in the Register and carry out the profession.
Continuous training during the profession
To register with the Register of Financial Advisors it is not sufficient to pass the assessment test and pay the registration fee. According to current legislation, candidates must possess certain requirements of good repute. In particular, they must not be bankrupt, incapacitated, or sentenced to a sentence that involves disqualification from holding public office. They must comply with anti-mafia legislation and not have been previously convicted.
Anyone who wants to work as a financial manager must know how to use certain financial analysis programs and investment management software which allow the creation of investment strategies taking into account accurate mathematical-financial algorithms. Obviously the financial advisor must stay updated on the dynamics of the stock market and the various investment products to offer customers advantageous solutions.
Where the financial advisor works: the difference between employee and independent
The financial advisor can be independent or employed. In the latter case, he works at credit or financial institutions, securities brokerage companies, insurance companies, and investment or asset management companies. Since it does not act autonomously, it cannot recommend to customers the products it wants, but only those offered by its reference institution. Generally, these professionals have a regular employee contract or collaborate as single-firm agents. It follows that it is not the customer who pays for the consultancy, but rather the company itself which pays the agreed amount.
If, however, it is an independent financial advisor, he works completely independently, without depending on credit or financial institutions. He has no conflicts of interest and never comes into contact with clients’ money, but limits himself to suggesting the operations to be carried out. As regards earnings, he is paid a fee only and exclusively for the consultancy service offered.
Original article published on Money.it Italy 2024-08-07 12:53:42. Original title: Chi è e cosa fa il consulente finanziario?
