Almost everyone who comes across the word ‘finance’ immediately thinks of taxes and money management. While it is true that finance is concerned with those issues, it includes a very wide world of perspectives. So is it a wonder then that people get lost in this complicated maze full of jargon and other legalese? This is where finance advice comes into play.
Finance advice allows for the finance layman to be steered through the complicated avenues of financial decisions with relative ease. Such advice can be obtained from many different sources; from professional finance analysts and advisors, to self-help books, and even the multitude of websites that deal with this topic on the Internet.
Finance advice is relevant to every stage of life. From designing a financial plan in the twenties, to good investment decisions and wealth accumulation in the thirties and forties, to planning the retirement plan for the sixties and further. But the topic does not limit itself to only these aspects. It also touches upon quite a few other important decisions.
Most websites that cater to this topic provide financial calculators which one can use to work out their cash flow and financial planning requirements. Advice on banking pertains to accounts management, direct debits, overdrafts management, and other such concerns. Finance advice also allows people to decide their credit card needs and find the one card which is best for them.
Debt management relates to all issues which require repayments, like mortgages. Advice allows choosing upon the best scheme, and to figure out which loans are better for a particular need and purse. It also deals with how to maximize savings, and offers the low down on ISAs and pyramid schemes.
Financial benefits like council tax, housing, and jobseekers allowance also fall under its umbrella. Advice also deals with long-term issues like designing the best retirement plan, and other insurance schemes like medical, health, life, and car insurances. Last but not least, finance advice deals with taxes, and everything that relates to it.
Finance advice also gives a wealth of tips and strategies for everyday concerns, like living within your means, creating a budget and sticking to it, and how to stay out of debt.
What is the Job of Finance Advisors?
Finance is often referred to as a shark’s world. While this may be true for the layman, it is the task of financial advisors to know how to negotiate in these tricky waters on behalf of their clients.
Finance advisors use their knowledge of investment, tax laws, and insurance to help a pool of clients work out the best financial plan for their goals. They also offer advice, and some even specialize in areas like retirement and estate planning.
Advisors can be found in two categories, namely personal advisors, who work with individuals, and financial analyst, who work in the corporate world.
The job of the personal advisor starts with a consultation with a client, where he notes down information about the client’s finances and goals. This then allows him to draw up a comprehensive plan, where key problems are identified and options are suggested for improvement.
Afterwards, the advisor usually meets with the client once or twice a year, to give an update on the financial situation, and to inquire of any action on the client’s part, like marriage or retirement, which may affect the plan.
The personal advisor can also, on behalf of his client, purchase and sell financial products like mutual funds or insurance, and is often responsible for drawing up taxes and preparing a client’s will. Personal finance advisors usually work from their own homes, and rely on word-of-mouth referrals.
Financial analysts usually work for banks, insurance companies, mutual and pension funds, securities firms, and other businesses. Their job is to help those companies make sound financial and investment decisions.
They are responsible for reading the company’s financial statements, and for analyzing the prices, costs, sales, expenses and tax rates of a whole industry to determine the company’s value and project its future earnings.
Such analysts are also needed in merger and acquisitions departments, to prepare analyzes of the costs and benefits of a proposed merger or takeover.
A bachelor’s degree in finance, accounting, business administration, or statistics, is usually required for finance advisors. Knowledge of accounting procedures, corporate budgeting, and financial analysis methods are often required of financial advisors, too.
A master’s degree is often desirable in that case. Personal finance advisors are strongly recommended to possess a degree in accounting, finance, economics, business mathematics, or law.