Types of Financial Advisors – PillarWM
Financial advisors are experts who help their clients strategize and create a blueprint for their short-term and long-term financial goals. There are several types of financial advisors. Some offer advice regarding insurance and tax, while others spend a great deal of their time researching and analyzing investment opportunities and meeting with clients to discuss different strategies. Working with the right financial advisor is essential for high-net-worth and ultra-high-net-worth individuals with liquid assets worth $5 million or more. If you are one of them, we suggest you read our Ultimate Guide on choosing the best type of financial advisor so you can preserve your wealth in the best possible way.
STRATEGIES FOR FAMILIES WORTH $5 MILLION TO $500 MILLION
The insights you’ll discover from our published book will help you integrate a variety of wealth management tools with financial planning, providing guidance for your future security alongside complex financial strategies, so your human and financial capital will both flourish.
Clients frequently share with us how the knowledge gained from this book helped provide them tremendous clarity, shattering industry-pitched ideologies, while offering insight and direction in making such important financial decisions.
Pillar Wealth Management is a financial advisory and wealth management firm specializing in helping investors with $5 million to $500 million in liquid investment assets. We offer high-quality services and have 30 years of experience in coming up with unique financial solutions for individuals and families. To schedule a meeting with one of our expert financial advisors, click here.
The term “financial advisor” is a broad term that includes several types of financial advisors. Each of these advisors specializes in different topics ranging from investment management to retirement planning. The level of training, education, and experience that a financial advisor receives makes a stark difference in their expertise area. Since their areas of expertise vary, they go by different names, which can confuse clients. But, don’t worry. We are here to help you decide which type of advisor would be most suitable for you to meet your future financial goals.
In this article, we will answer some frequently asked questions about financial advisors, such as: What is the best type of financial advisor?What are financial advisors called?Is it smart to hire a financial advisor?
Who Is a Financial Advisor?
In simple words, a financial advisor is anyone who gives you advice about your finances. They are professionals who work with clients and guide them related to their money matters. They provide financial advice to customers for a fee and provide several services, such as portfolio management, investment management, estate planning, and tax planning.
Registered financial advisors must carry the Series 65 license to conduct business with their customers. As someone with a high or ultra-high-net-worth, you must do your due diligence and research when looking for a financial advisor. Our book, The Art of Protecting Ultra-High-Net-Worth Portfolios and Estates, is the definitive guide for valuable investment and family wealth protection.
What Does a Financial Advisor Do?
If you are wondering what exactly a financial advisor does, you should pay attention to this section.
A financial advisor is someone who is often responsible for more than just executing trades on behalf of their customers in the market. Financial advisors use their expertise and knowledge to create customized financial plans for each of their customers to help them achieve their financial goals. These plans include some critical decisions such as investment decisions, required savings and budget, tax and insurance strategies. Financial advisors also check in with their clients weekly or monthly to reevaluate their present financial situation and plan for the future accordingly.
Let’s look at what financial advisors do with an example:
Suppose you want to retire in 30 years or send your child to an Ivy League college in the next 15 years. To accomplish each of these goals, you might need the assistance of a skilled financial expert with the proper knowledge, expertise, and licenses to make your plans a reality. Together, you and your financial advisor can deduce how much you should save, the kinds of accounts you should keep, and the types of insurance you should have (such as term life, long-term care, disability, etc.). A financial advisor will also assist you with estate and tax planning or connect you to those specializing in these fields.
Part of a financial advisor’s job is to manage your portfolio according to your needs. Suppose you are a 50-year-old millionaire that is primarily interested in capital preservation. In that case, a financial advisor will help you find the right investment products that fit with your risk profile as well as your future financial goals.
To achieve outstanding portfolio performance, refer to our Performance Guide on Improving Portfolio Performance, especially for high-net-worth and ultra-high-net-worth clients. Suppose you have a net worth of $10 million or more. In that case, you might also enjoy our guide with exclusive strategies and expert guidance from financial advisors called 7 Secrets to High-Net-Worth Investment Management, Estate, Tax, and Financial Planning.
To speak to a financial advisor to learn more about what they do, schedule a meeting with Pillar Wealth Management today by clicking here.
What Are Financial Advisors Called?
Depending on their knowledge, skills, and expertise,financial advisors may also be known via some other names that reflect their specialization area. Some common words for financial advisors are investment advisors, accountants, brokers, insurance agents, estate planners, tax planners, financial planners, account executives, etc.
Types of Financial Advisors
In this section, we will discuss the different types of financial advisors and the services that each of them provides so you can figure out which advisor will be best suited to your financial needs:
1. Investment Advisors
“Investment advisor” is the legal term used by The Securities and Exchange Commission (SEC) to denote a registered financial professional. The SEC describes an investment advisor as a company on an individual that offers advice regarding investments and charges a fee for it.
An investment advisor is someone who gets paid for providing investment advice to clients. Investment advisors also have the liberty to manage client assets directly after receiving their consent.They specialize in offering advice regarding securities and investments to their clients.
Once registered, an investment advisor is known as a registered investment advisor (RIA), although, in most cases, they might use a different title. Regardless of their designation, an investment advisor can giveyou some pretty helpful advice regarding your portfolio’s management.
Investment advisors can also help you choosebetween several investment opportunities, rebalance your portfolio and manage your entire investment portfolio. Most investment advisors also offer brokerage services. Registered investment advisors have a fiduciary duty to their clients. This means that they must act in their best interests of their clients. Hence, a registered investment advisor will always recommend the best investment products and services to you rather than urging those that pay them the highest commissions.
A broker is a company or an individual that buys and sells securities such as bonds, mutual funds, and stocks on behalf of the client. The financial products a broker can sell depend on the licenses that they own. For example, a broker who has passed the Series 6 exam can only sell mutual funds, variable annuities, and other related products. On the other hand, aSeries 7 license allows the broker to sell additional securities.
A broker acts as an intermediary between individual investors and a securities exchange. They are usually paid commissions when you buy or sell securities through them. There are two main types of brokers:
Full-Service Brokers: Full-service brokers mainly provide customized investment advice but are more expensive than discount brokerages.
Discount Brokers: Discount brokers charge lower commissions and fees than full-service brokers, but you usually have to choose investments independently. They don’t advise you; they only buy/sell for you.
3. Financial Planners
Financial planners are one of the prevalent types of financial advisors. They take a holistic approach when advising clients about every aspect of their financial lives. Financial planners aim to build plans for their clients that incorporate budgeting, college funds for children, insurance needs, emergency savings, retirement planning, and estate planning.
Financial planners are advisors that can offer services that don’t require following and adhering to strict regulations. They can guide on paying down debt, creating a budget, planning for retirement, etc.
However, some financial planners also act as investment advisors. They have the freedom to sell insurance and investment products. Some planners can also act as brokers. There is a wide variety of different services and that financial planners can provide, and there are no state or federal authorities that can regulate them.
4. Portfolio/Investment/Asset Managers
Asset, investment, and portfolio managers do the same thing, regardless of what their business card says. These professionals manage client investment portfolios and assets, but that’s not all they are limited to do. A portfolio, asset, or investment manager might pay more attention to a client’s investment or asset portfolio, but they might offer other financial planning services as well.
If you want someone actually to manage your assets, look for an asset manager of some sort. If you want someone to manage your investment portfolio, you should look for a portfolio or investment manager.
Once you find a manager, take a look at our guide titled 5 Critical Shifts for Maximizing Portfolio Growth Strategies for Families Worth $5 Million to $500 Million with them and see how you can maximize your portfolio and strengthen it.
5. Wealth Advisors
Wealth advisors (also known as wealth managers) typically work with high-net-worth and ultra-high-net-worth clients to offer them guidance regarding investments and holistic financial planning services. They often serve their clients in several areas of their financial situation, such as retirement planning, investment management, tax planning, charitable giving, and even health insurance. Since they work for people with assets in millions, wealth advisors also specialize in areas like philanthropic planning and estate planning.
When interviewing wealth managers, you must ask them if they are fiduciaries, in addition to inquiring about their professional distinctions. Anyone can call themselves a wealth manager but not all wealth managers are fiduciaries. Only those that are fiduciaries will act in your best interests at all times.
Now that you know about the different types of financial advisors, it’s time you speak to one about your needs. To talk to a financial advisor from Pillar Wealth Management, click here to schedule a meeting or a consultation right away!
What Is the Best Type of Financial Advisor?
There is no guaranteed answer for this question since no one type of financial advisor is best for all families and individuals. The best financial advisor for you will honestly depend on your financial goals and current financial situation.
A financial advisor that understands your financial needs, allows you to choose services that you want, is not insanely expensive, and has a strong background with several years of experience is an ideal choice for you.
Suppose you need help choosing the best financial advisor. In that case, you should refer to our Ultimate Guide to Choosing the Best Financial Advisor made especially for investors with $5 million to $500 million in liquid assets.
Is It Smart To Hire a Financial Advisor?
So is it smart to hire a financial advisor? Yes! If you have liquid assets ranging between $5 million and $500 million, it makes sense for you to hire a financial advisor. Financial advisors can help provide a roadmap if you ever feel lost while planning financially for the future. Their expert advice and guidance can open you to a world of investment opportunities that can benefit you in the long run. If you are someone who does not have the time to or does not like dealing with money, you should definitely hire a financial advisor to take care of it.
Now that you are aware of the different types of financial advisors, you should find one!
Pillar Wealth Management is a wealth management advisory firm that provides expert services to clients with $5 million to $500 million in liquid assets. Our co-founders, Hutch Ashoo and Chris Snyder have combined experience of 64+ years in helping create an exclusive firm to attend to and help high-net-worth and ultra-high-net-worth investors.
You can get in touch with a financial advisor from Pillar Wealth Management today by clicking here and scheduling a meeting according to your convenience.
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