What Does a Financial Advisor Do?

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Do you need to hire a financial advisor but are unsure of what they actually do? 

That’s not uncommon given that there are several similar titles being used for financial professionals such as a financial planner, a broker, financial consultant, or an investment advisor. 

To help clarify the role of a financial advisor, we will list the types of services they usually provide.

They Provide Financial Advice

As the term indicates, a financial advisor is someone who provides advice on financial matters. These matters may differ depending on what your financial needs and goals are. 

A financial advisor will examine the information you provide to help determine the best course of action for you. They use their expertise and skills to advise you on your financial concerns. 

A financial advisor will also answer any finance-related questions you may have and educate you on the matter. 

If you go to, you’ll see that financial advisors provide advice related to retirement, personal finance, tax and estate planning, etc. 

They Help You Plan For the Future

One of the main services a financial advisor provides is helping you plan your short-term and long-term goals. Money can be intimidating, especially for young adults who are just starting to think about some big steps in life such as savings, purchasing a home, paying off their student debt, etc.  Let’s say you are not very good at money management but you would like to retire 20 years from now. How would you achieve that? What would you need to do right now to help meet that goal?

Your advisor can also help you meet your short-term goals such as managing education expenses or buying a home. They will help you figure out how much you should save, what kind of bank account you need, etc.

You discuss your financial goals with your advisor and they use their extensive knowledge to advise you on the right path. It is their job to help you devise a strategy to achieve your goals, both short-term and long-term. 

Help You Handle Your Taxes

One of the most daunting things in any adult’s life is handling taxes. It’s a constant source of confusion and many people fail to file their tax returns on time thus facing penalties. Often, they under or overpay their taxes due to miscalculations. They also aren’t always aware of the tax breaks they are entitled to. That is one of the advantages of hiring a financial advisor.

A tax advisor will not only help you file your taxes on time, but will also ensure that you pay what you have to and not a cent more. They will also help you take advantage of any tax breaks available to minimize your tax bill. When the time comes, a financial advisor can also help you get the tax refund that you are entitled to. 

Tax planning is easy when you have a professional guiding you through everything.

Recommend Investment Opportunities

Your financial advisor can also recommend the best investments for you, or they can invest on your behalf. Investing can be overly complex for someone new to it, so professional advice makes a real difference.

Let’s say you’ve decided to start investing in order to save enough money and retire comfortably in your 50s or 60s. To achieve this, you will need to invest your money cleverly. This is where your advisor can help. 

Regardless of how much money you’re willing to invest, your advisor will research investment opportunities for you and then recommend specific investments that they deem to be best for reaching your short-term or long-term goals. This includes helping you decide whether to invest in stocks or mutual bonds. They will also help you understand the risks involved with each investment. 

However, you are not obliged to listen to them. You are free to do your research and invest in what you will because, in the end, it’s your money. It’s also worth noting that some financial advisors may receive a commission for selling certain investments so that’s something to keep an eye on.

Provide Regular Updates

Once your financial strategy is in place and your goals are set, your financial advisor will help you stay on the right path by monitoring your financial health and providing updates when needed.

This includes changing or adjusting your strategy as needed in order to meet your goals. 

A good advisor can transform your financial situation. That is why you must do your due diligence when hiring a financial professional to ensure that your money is in good hands.