Generally, there are two basic categories of credentials: advisory credentials and securities licenses. The bulk of advisory credentials, though, represent specialized knowledge about such topics as divorce finances or alternative investments.
Their names often say it all:. CMFCs are experts in mutual funds and other packaged investment products. Securities licenses, on the other hand, are more about the sales side of investing. Financial advisors who are also brokers or insurance agents tend to have securities licenses. The most popular securities sales licenses include Series 6 and Series 7 designations.
A Series 6 license allows a financial advisor to sell investment products such as mutual funds, variable annuities, unit investment trusts UITs and some insurance products. The Series 7 license, or General Securities license GS , allows an advisor to sell most types of securities, like common and preferred stocks, bonds, options, packaged investment products and more.
Generally, a financial advisor offers investment management, financial planning or wealth management. Investment management includes designing your investment strategy, implementing it, monitoring your portfolio and rebalancing it when necessary.
This can be on a discretionary basis, where the advisor has the authority to make trades without your approval. Or it can be done on a non-discretionary basis. Financial planning, on the other hand, often involves the creation of a financial plan or blueprint for your finances. Or if you have specific needs, you can hire the advisor for financial planning on a project basis.
Most advisors offer:. Academic advisors serve as a connection between students and other resources. They inform students of other opportunities such as internship or campus employment information. They provide contact information and guide students to school resources regarding residential life, student affairs, financial aid, or mental health counseling. Advisors have many connections all over the campus that students can view them as a resource to use when trying to figure out solutions to a variety of problems.
Advisors have specific functions, but their overall mission is help in ways that will allow for overall student success. Navigating a college or university can be a daunting task.
There are many rules to follow and requirements that students must fulfill. An academic advisor can help students in meeting their requirements as well as provide guidance in many different areas. In this case, steps can be taken to prevent that outcome.
It will look at reasonable withdrawal rates in retirement from your portfolio assets. Additionally, if you are married or in a long-term partnership, the plan will consider survivorship issues and financial scenarios for the surviving partner.
A financial advisor is not just someone who helps with investments. Their job is to help you with every aspect of your financial life. In fact, you could work with a financial advisor without having them manage your portfolio or recommend any investments at all.
For many people, however, investment advice is a major reason to work with a financial advisor. The advisor will set up an asset allocation that fits both your risk tolerance and risk capacity. The asset allocation is simply a rubric to determine what percentage of your total financial portfolio will be distributed across various asset classes.
A more risk-averse individual will have a greater concentration of government bonds, certificates of deposit CDs and money market holdings, while an individual who is more comfortable with risk may decide to take on more stocks, corporate bonds, and perhaps even investment real estate. Your asset allocation will be adjusted for your age and for how long you have before retirement. Each financial advisory firm is required to make investments in accordance with the law and with its company investment policy when buying and selling financial assets.
Keep a close eye on the fees you are paying—both to your advisor and for any funds bought for you. Ask your advisor why they recommend specific investments and whether they are receiving a commission for selling you those investments. Be alert for possible conflicts of interest. It should be based on how soon you need the money, your investment horizon , and your present and future goals.
The advisor will also set up regular meetings to review your goals and progress, and to answer any additional questions you may have. Meeting remotely via phone or video chat can help make those contacts happen more often. Anyone can work with a financial advisor at any age and any stage of life.
If you cannot afford such help, the Financial Planning Association may be able to help with pro bono volunteer assistance. An advisor can suggest possible improvements to your plan that might help you achieve your goals more effectively.
Here are some more specific ones. Because we live in a world of inflation, any money you keep in cash or in a low-interest account declines in value each year. Investing is the only way to make your money grow, and unless you have an exceptionally high income, investing is the only way most people will ever have enough money to retire. But, overall, investing should increase your net worth considerably. A financial advisor can also help you put together an estate plan to make sure your assets are handled according to your wishes after you die.
Indeed, a fee-only financial advisor may be able to offer a less biased opinion than an insurance agent can. Financial advisors can assist you with investing and reaching your long-term goals in so many ways.
Financial advisors know more about investing and managing money than most people. They can guide you to better choices than you might make on your own. Financial advisors help keep you on track by talking you out of making emotional decisions about your money. This can include everything from what investments to make to what insurance to buy. As your life circumstances change, a financial advisor can help you adjust your financial plan so that it always fits your current situation. The rule was passed, its implementation was delayed and then a court killed it.
But in the roughly three-year interval between President Obama's proposal of the rule and its eventual death, the media shed more light than it had previously on the different ways financial advisors work, how they charge for their services and how the suitability standard might be less helpful to consumers than the fiduciary standard. Some financial advisors decided to voluntarily move to a fiduciary standard or more heavily promote that they already operated under that standard.
But even under the DOL rule, the fiduciary standard would not have applied to non-retirement advice — a standard that is bound to cause confusion. Under the suitability standard, financial advisors typically work on commission for the products they sell to clients. This means the client may never receive a bill from the financial advisor.
A common question that students have when looking into academic advising is what an academic advisor actually does on the job. This type of counselor must remain up-to-date with the requirements of the programs offered by the school and keep detailed records about each student they counsel. Students will make appointments to speak with their counselors prior to enrolling in classes for the next semester. Advisors must know what classes students still need to take, which classes count towards their majors and minors, and whether the students maintain grades high enough to remain within the program.
They may also help students apply for graduate school and enroll in semester-abroad programs. Academic counselors or advisors generally work in colleges. Those working in community colleges may help students apply for a more traditional college or help them learn more about the job opportunities available to them.
They can also work in vocational schools and help students better understand the requirements for graduating and with applying for their first jobs. Some high schools also hire academic advisors to assist students planning on attending college. Colleges that use professors as academic advisors require that those professors have a terminal degree in their fields. Many fields require a Ph.
If you work in a community college, vocational school or high school, you may need a teaching license. Most positions require a counseling license, which is available from the state. The National Board for Certified Counselors offers a credential test that helps you get your license.
Academic advising shares much in common with school counseling, which is why the Bureau of Labor Statistics BLS combines academic advising with other types of career and school counseling. Private colleges often pay more.
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