Perhaps one of the most frequent names used by financial advisers, such as “financial advisor,” is not linked to any particular accreditation. If anybody adopts an official designation title, wouldn’t presume they have specialized training, qualifications, or licensing. However, do not be concerned. Let us look into some of the types of financial advisors so that you can find the right advisor for your situation.
- Investment advisor: While the phrase “investment adviser” is the legal concept being used by the Securities and Exchange Commission to describe a financial expert who should be licensed, this is also regularly seen as a work description and is written “advisor.” A financial adviser is an individual or corporation that is compensated for giving customers investment services. Customer securities could also be managed directly by investment advisors. The FIRA may and must be used to check an advisor’s accreditation.
- Financial consultant: The word “financial consultant” is a broad concept that could be applied to everybody. However, certain financial consultants have earned the title of chartered financial consultant. CFPs and chartered financial consultants both have comparable schooling qualifications.
- Broker-dealers: A broker-dealer is a person or business that purchases and sells assets including equities, bonds, and collective investment schemes. Broker-dealers could purchase and resell on behalf of their customers (as a brokerage), with their accounts (as a trader), or for combination. Broker-dealers have normally had a membership of FINRA in addition to being registered with the SEC. The financial services that a broker-dealer salesperson could provide are determined by their licenses. A broker-dealer who has cleared the Series six test, for instance, is only allowed to offer mutual fund schemes, term deposits, and other similar products. The bearer of a Series seven license is able to sell other securities.
- Certified financial planner: These are financial planners who’ve already completed the CFP Commission’s stringent educational and experience criteria, cleared the certification examination, and adhere to high moral standards. CFPs owe their customers a fiduciary obligation. Financial planners could provide non-regulated products like advice about how to clear back debts, prepare for retiring, or develop budgeting, but others act as investment advisors. It’s worth noting that financial counselors alone without CFP qualification could use the term “financial planner.” When you’re searching for a certified financial planner, try and check their qualifications with the CFP Boards.
- Asset manager: These people handle customer investment strategies, regardless of whether their company certificates state asset supervisor, investment adviser, or portfolio manager. While a portfolio manager or investment supervisor might focus only on a customer’s investment group, professionals could also provide additional financial products and services.
Except they qualify for any exemptions, anybody marketing assets or providing financial guidance should enroll with a federal regulator.