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The Role of a Financial Advisor


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What Does a Financial Advisor Do?

Financial AdvisorA financial advisor plays an important role in your life if you have any amount of money invested in the stock market or other investment arenas. As the title indicates, he or she provides advice. This advice is most often given with regard to retirement but a financial advisor is capable of helping clients manage all types of investments.

The job of a financial advisor is usually referred to as asset allocation. By arranging investments in their proper proportion, these advisors try to maintain a balance between risk levels and returns on your investments. Returns are often subject to taxes on capital gains so advisors have to do more than simply encourage profits in an investment portfolio. Essentially, an advisor’s job is to provide informed assistance and not just urge their clients on to particular investments.

Do I Need a Financial Advisor?

This is a much more pertinent question than it was years ago. Today, many private investors are so independent that they are even going without stock brokers. However, this is not recommended for all investors. It is not even recommended for experienced investors unless they can work full-time on their investment portfolios.

People who are new to investment absolutely need to have a financial advisor. This person may be provided by the company for which they work. If not, investors should seek one to advise them anyway.

Even after acquiring years of experience, an investor would do well to keep an advisor or consult with one regularly for advice on certain matters. A financial advisor can lend his or her expertise to important decisions when investors do not have the time or the knowledge to apply to a transaction.

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