What does a Financial Advisor Do?

Mitchell Kotheimer, CFP®
Mar 25
 · 
4
 min read · 
Advisor
What is a Financial Advisor?

What is a Financial Advisor?

Managing finances can be a complex and overwhelming task, especially for those who lack financial expertise. In such cases, seeking help from a financial advisor can be the right step. A financial advisor can help individuals and businesses plan for the future and make smartinvestment decisions. 

What is a Financial Advisor?

A financial advisor is a professional who provides financial advice to individuals and businesses. They help clients manage their finances, plan for future goals, and make informed investment decisions. Financial advisors can be independent or work for a financial services company. Theyprovide a range of services, including financial planning, investment management, tax planning, and retirement planning.

Who Should Use a Financial Advisor?

Almost everyone can benefit from a financial advisor's services. It is important to understand your unique needs before seeking out professional help.  Utilizing a Financial Advisor can help you build wealth by paying down debt, investing for future goals, and sticking to a savings plan. Advice from a financial professional is not limited to investing in the stock market. Many Financial Advisors specialize in a certain area, such as retirement or estate planning. Below are some of the most common services that financial advisors may provide.

Financial Planning

Financial planners assist their clients in setting financial goals and creating a plan to achieve them. They often take a holistic approach to understanding a client’s financial situation, taking inventory of an individuals net worth, cash flow, and investment accounts. They can help you develop a budget and recommend ways to save and invest money. They can also review insurance policies and estate planning items, and make recommended adjustments to help improve the overall financial plan. 

Investment Management

Financial advisors may also develop a portfolio of investments tailored to the client's investment goals and risk tolerance. They may recommend specific types of accounts which suit a client's needs, such as a 529 plan or an individual retirement account. They can also monitor investments, provide updates on performance, and recommend adjustments with respect to a client’s changing goals and fluctuating market conditions.

Tax Planning

Tax laws are ever-changing, so a financial professional can provide valuable insight into current legislation. There are many strategies to minimize taxes, such as maximizing deductions, and contributing to tax-sheltered retirement plans. Some financial advisors may prepare and file your taxes for you, or coordinate with your accountant in order to do so.  

Retirement Planning

Financial advisors typically review and create retirement plans to meet client's needs. They may select specific investments for a retirement portfolio, based on length of time until retirement, expected inflation, and an individual’s income needs. There are many types of retirement accounts, so an advisor may select one or more to utilize depending on an individual's specific needs. Another important factor they consider is the impact of Social Security and Medicare benefits, aiming to maximize those benefits if possible.

Summary

Your financial situation will inevitably change throughout your lifetime, and a financial advisor is a valuable resource to guide you through these changes. Whether you prefer to take a holistic approach, or you need help planning for a specific goal, professional help can ease the burden of planning for your future. Domain Money offers a comprehensive suite of financial services including investment management, tax planning, and retirement planning. Your financial advisor will help you negotiate bills, review insurance, employee benefits, and much more - all for just $59 per month.

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