The Other Roles of Financial Adviser

Financial advisors have always played a crucial role in the development of financial industry. Historically, we have seen individual advisors selling mutual fund units of Unit Trust of India, insurance policies of Life Insurance Corporation, bank and post office fixed deposits, NSC, PPF, public issue of shares of company either directly or as sub broker and the list goes on. The Financial Advisor is not a new face, he is trusted, old face, related and closely knit. He has walked you through lot of ups and downs of your life. Hence apart from only INVESTMENT & GENERATING RETURNS advisor also play important role which helps in building a good financial life.

The Other Roles of Financial Advisor

Image courtesy of Kittikun Atsawintarangkul /

Other roles of a financial advisor

Other roles of a financial advisor

Most of the people lack the knowledge of financial market and don’t know how to invest and where to invest. They don’t have adequate time and resources to study the market and prepare their financial plans. Financial Advisors help people meet their financial goals. They help people in selecting appropriate financial products and making investments in those products. Basically this is a step backward as advisor act as coach first. So he helps in making available the unbiased third party guidance for taking various financial decisions in life which may include

  • making a retirement plan.
  • managing a financial crisis.
  • managing an unexpected windfall gain (through lottery or inheritance).
  • making financial preparations in case of marriage.
  • making arrangement of funds for child’s education.
  • Coping financially in case of death of the earning member of family.
  • arranging the funds to purchase a house.
  • getting suitable insurance cover against health and disability.

And the list goes on…

So, apart from Returns a Financial Advisor deals in:

Roles of Financial Advisor

  1. Formulation of measurable financial goal– All want a big house, a luxury car and a well to do retirement. But how much it will cost, no one knows. Financial advisors help investors in setting their financial goals which are realistic and measurable. One can do with a 3 bedroom flat instead of a mansion or a small car can suffice instead of a sedan and this is what financial planner makes you realize. Clients often don’t have a complete idea of what their actual needs are and what are the realistic ways to accomplish those needs. A financial advisor helps investors in understanding their future needs both in terms of quantity and timing.
  2. Review and Adjustment of financial goals– Financial goals requires continuous review and monitoring through the various life stages of the investor. A small event in life can change the goals or additional goals are created. This can be accomplished better by none other than a professional financial planner. They help investors to stay on track to meet their goals and make necessary changes under required conditions.
  3. Asset Allocation– It depends which asset a person is in during what time. A judicious mix of asset helps in growing wealth and reduces controllable risks. Financial Advisor opts for a diversification strategy to manage the investment risk. They allocate the investments of the investors in various asset classes like equity, debt, liquid, gold etc according to their goals. Each asset class has its own perks and threat. His job is to make you aware of rewards and pain in adding or reducing a particular asset.
  4. Risk Management– A financial advisor aims at achieving the correct risk/return trade off keeping in view the risk profile of the investor. A strategy may be beneficial & financial advisor makes full utilization of tools available in the market to manage the risk associated with the portfolio
  5. Product knowledge– There are thousands of financial products available in the market which makes difficult for an individual to choose the best products suitable to him. A financial advisor delves into the nitty gritty of each investment product and helps the investors in choosing the appropriate products. Also it is never bad to understand the product one is investing in for long time. The financial advisor is the best person to get that understanding and even getting comparison.
  6. Financial Control– A financial advisor sets an appropriate financial plan for the investor keeping the goals in mind. One of the key elements of financial plan is to make adequate arrangement for unforeseen financial crisis.  This is done by making a proper budget, understanding contingencies and buyers emotional responses of the client. Thus a financial advisor makes sure investor’s family is protected from financial crisis.
  7. Tax Planning– Entire personal finance industry started from tax planning. This is still an embedded concept in investments. A good financial advisor provides the best approaches and products for dealing with taxes. As most of the investment decisions carry tax implications in the form of short term/long term capital gain/loss. Financial advisor plans the investment in such a manner that keeps that tax implications to a minimum level.
  8. Unbiased management of portfolio– Financial Advisors provides specialized services to investors as a neutral third party person. An investor generally tends to make emotional decisions when it comes to managing their investments. Thus an investor gets benefited from the balanced, unbiased perspective of the financial advisor. A financial advisor will give unemotional assessment of the needs of the investors.
  9. Recommendation of experts– Not all work can be done by investor or his financial planner. In due course including attorneys, accountants, property experts, commodity experts, currency advisors and changers, art dealers and other experts are required as per investors need. A financial advisor can be source of recommendation for these requirements saving investors time and money. Can also work as a translator between client & expert.
  10. Estate Planning– Proper financial planning through a professional financial advisor ensures that the estate passes on to the family members down the hierarchy in a smooth manner that protects as much as its value. A financial advisor can be an important person in this process and can be trusted as trustee to the will.

Hence like a friend, a financial advisor can also have multi-role in your life, it all depends how you respond to the relationship and mutually offer him space.

What has been your relationship level with your financial advisor? Share your story/views in the comments sections.

Other roles of a financial advisor


  1. One of the best possible article on the positive aspects of FINANCIAL ADVISOR..Most of the time, its the Negative aspect which is being highlighted by everybody, be it common public or media..

    Thanks from the bottom of my heart for giving a booster shot to all of the Advisor community…

  2. बहुत ही अच्छा लेख है जो यह बताता है के मनुष्य के जीवन के हर क्षेत्र के सामान वित्तीय क्षेत्र में भी एक योग्य व्यक्ति की आवश्यकता है इस दौर में ,उसे वित्तीय सलाहकार या निवेश सलाहकार कह सकते हैं
    लेकिन भारत में बहुत कम लोग है जो कंप्यूटर सेवी हैं ,तो यह लेख बहुत कम लोगों को लाभ पहुँछा पायेगा ,अगर कुछ ऐसा हो सके के डेली न्यूज़ पेपर्स जिनकी पहुँच जनसाधारण तक हो ,में यदि इस प्रकार के लेख निकलें तो निःसंदेह बहुत बड़ा बदलाव आ सकता है लोगों के सोच में

  3. Hi Hemant
    A financial planner is just like a family doctor we used to have when we were kids. Unfortunately we do not have that now.

  4. I know people who will willingly lose large amount of money but won’t engage the services of a financial advisor. Also many reputed names have spoiled the name of an advisor.

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