What Financial Advisors Are All About: The Basics
If you want the summary of this article, skip to the bottom of the article body and read The Final Word…, but if you want to become an expert on financial advisors yourself, then go ahead and read all 818 words.
To begin, just what are finances? This may seem silly, but the most basic concepts are also the most profound that philosophers love to play with and try to systematize. Finances refer to the exchange of goods and services in the form of one currency or another, but has also come to conjure thoughts and ideas of balance and record-keeping. Balance often comes to mind because a good financial situation is a balanced financial situation with exports (expenses) equaling imports (income). A perfect balance between the two is theoretically the most beneficial for trade and thus, everyone’s prosperity. The way that you attain this balance is through record-keeping. A complete log of all transactions and exchanges made allows one to see exactly why their finances are as they are and how they can tweak them to get where they want to be.
Now that we have a basic concept of finances, just what is a financial advice for Australians in Singapore, and what do they do? A financial advisor is someone who serves others by helping them achieve this balance in finance, but taking this into context, they also help others achieve their dreams by giving them a concrete plan to achieve the means to do so. They take highly detailed information about you, your family’s, or your business’ income, expenses, and plans for the future in order to develop a financial plan that will allow the necessary capital. Financial advisors also have intimate knowledge of the current standings of different markets and economies both local and global to help you make the right decisions with your money.
So, how exactly do financial advisors make a living? They are paid through a lump sum, a percentage of your total assets’ net worth, or a combination of these two factors. Most financial advisors charge between %1-2 of your total assets, but this number drops the more your assets are worth. As you might have figured already, if financial advisors are paid through a percentage of how much you are worth, then it is in their best interest to increase the value of your assets. Basically, their payment method is an assurance that they will work for you and not for some outside company or business.
Many people already keep track of their own finances to a degree, so why should you seek the advice of financial advisors when you can advise your own finances? These are trained and experienced professionals with the most up to date information in their field. Unless you are a financial advisor yourself or take the profession as a major hobby, chances are good that someone who does it for a living knows the most about the state of the market and keeping people and business afloat. Besides the worth of their knowledge, they can also save you an incredible amount of time and stress that so many people go through in keeping track of their records, bank accounts, assets, etc.
So just what does make financial advisors credible? If their payment method isn’t enough, there are organizations that promote credibility and ethics within the field of financial advising. There are many of these organizations that offer distinguished titles across the globe, but some of them are CFA Success (Chartered Financial Analyst), the Association to Advance Collegiate Schools of Business (AACSB), and the Assoication of Collegiate Business Schools and Programs (ACBSP). The later two actually accredit the business schools who train financial advisors and not the individuals themselves. Be sure to ask any financial advisors you consult where their training comes from.
What would good financial advisors be like? Good financial advisors would ask for all of your financial records in their most current state. Good financial advisors would ask about the condition of your assets, where you plan to be financially and career-wise in five years, what you know you’ll be spending money on, and what you’d like to do or have if you had the extra funds. They would always offer you financial advice that’s worth more than what their costs are. They would reflect their level of professionalism and bring you to that same level.