Financial consultants, advisors, financial wellness coaches—whatever you want to call them—help you crush your money goals. But they do it in different ways.
Some financial consultants receive a commission for their products while others work on a fee-only basis and are required to follow fiduciary standards. These professionals are more reliable and will help you avoid costly mistakes that can be made by commission-based advisors.
Personal Finance
There are many nuances to personal finance, and financial consulting professionals can help clients sort out all of the details. They can help with a variety of money needs, such as investing in real estate or saving for retirement. They can also provide guidance on a number of financial planning topics, including tax preparation, debt management and life insurance policies.
A financial consultant can help you understand the ramifications of making a poor decision, such as taking money from your retirement account before age 59.5 or buying an expensive home when you should be saving for a college education. They can also help you identify your blind spots, like the pitfalls of emotional decision-making when it comes to your finances.
When looking for a financial consultant, it is important to consider their professional certifications. Check their FINRA licenses, if they sell investments, and whether or not they are a certified financial planner (CFP). They should be willing to work with you in a fiduciary role, meaning they must put your best interests ahead of their own.
Public Finance
Finance is a giant field that encompasses every aspect of our lives that deal with money and currency. It relates to everything from bank-related deposits and savings schemes to taxation and investment strategies.
Financial consultants can help individuals develop a strategy to meet their goals. They will typically start by reviewing their clients' assets and liabilities. They will then work with the client to determine their short- and long-term goals and understand their risk tolerance. Financial advisors may also be able to help with retirement planning, estate planning and tax strategy.
Many financial consultants have a bachelor's degree in finance, economics or business. They can also have a financial planner (CFP) or chartered financial analyst (CFA) designation. Some have additional certification, such as Chartered Financial Consultants (ChFC). SmartAsset's free tool can match you with pre-screened financial advisors who specialize in your needs. Get started today.
Business Finance
Financial consultants work with businesses to review and evaluate their current financial situations. They provide analysis from a number of aspects, including accounting, insurance and business management. They may also help their clients make recommendations for short-term or long-term goals. They often have a number of certifications, such as Certified Financial Consultant (CFC).
Business Due Diligence services are valuable to both small and large companies. They can help a company understand its strengths and weaknesses, which in turn helps it make smarter decisions. They can also provide advice on a variety of topics, such as government regulations, industry trends and growth opportunities.
While many financial consultants start out their careers with established firms, some decide to go independent. While this can be a great option for some, it comes with some challenges. For example, it can be difficult to scale an independent firm without the right software in place. This can lead to a longer learning curve and less efficiency.
Financial Policy
Financial policy is a set of rules for managing finances within an organization. These policies provide a framework for staff to innovate and implement solutions to meet organizational goals. They can also clarify strategic intent and define boundaries for staff to work within.
As businesses grow, their financial policies may need to be reviewed and updated. It's important to include these changes in a regular process review to make sure the policies are effective and capturing best practices.
Choosing the right financial consultant is key to finding success in this field. It's important to look for a professional that is licensed and has a strong background in business. It's also important to choose a financial advisor who is a fiduciary and doesn't accept commissions for investments they sell. This ensures they are always working in the best interest of their clients. Additionally, financial consultants who are driven will appreciate a firm that offers professional development programs and mentoring opportunities.
