A financial consultant is an independent professional who offers financial advice to customers according to their individual financial circumstances. The term ‘financial consultant’ often refers to a number of financial consultants who are offering financial advice to businesses and individuals. In most countries, financial consultants must obtain specific financial licensing and comply with certain regulations in order to give professional financial advice to customers. In some countries, financial consultants are not permitted to give professional financial advice to individuals. Financial consultants use a wide variety of financial tools to help individuals and businesses plan for the future, including budgeting, investment, pension and savings advice, as well as handling day-to-day transactions, such as payroll and accounts payable. The role of a financial consultant can be both passive and active, depending on the needs of the client.
In most countries, financial advisers must be licensed by the Financial Services Authority (FSA). This agency monitors the professional qualifications of financial advisors, publishes a Financial Services Register (FRS), and sets out criteria for those advisors to achieve license. As well as licensing, FSA regulates the conduct of financial advisers, requiring them to undertake an approved training programme and providing consumers with information on how they can access independent financial advice from these professionals. Financial advisers are also required to complete an approved Practice Examination that proves their knowledge of banking legislation, risk management and debt prevention, among other things. Financial advisors can also work as members of advisory and consumer groups that provide consumers with the opportunity to access independent financial advice.
In the United Kingdom, the Financial Services Authority regulates financial advisors, ensuring that they provide competent, reliable financial advice to customers. However, the FSA considers that all financial advisors should have a practicing certificate from a regulatory organisation. Non-Practicing advisors cannot hold a practising certificate unless they complete a prescribed course on professional development. Undertaking any courses does not guarantee that financial advisors possess the experience and knowledge to give sound financial advice.
In the United States, financial consultants in the United States must register with the Financial Planning Regulator or FPR. They also need to obtain a license or registration if they want to trade independently. Regulated firms cannot hire or promote to consumers without first undergoing an FPR examination. This also applies to self-regulating organizations.
The United Kingdom requires financial consultants in the UK to register with the Financial Services Authority (FSA). These consultants must then undergo a prescribed FPR examination. Although they are not regulated in the United States, Financial Consultants in the United Kingdom is regulated by the Financial Services Authority. Advisors are also monitored by the FSA, who sets out minimum standards for the practice of advising and provides guidelines to help guide brokers and investors towards the best investments for individual customers. To comply with these guidelines, advisors have to ensure that they advise their clients on suitable investments and on the risks associated with those investments.
A financial consultant can play many different roles and is not limited to simply advising on savings and investment options. They may assist a client with estate planning, insurance settlements and retirement planning and plan reviewing. Financial consultants in the United Kingdom must be registered with the Financial Services Authority or FSA. They are also regulated by the Financial Services Authority and need to undergo a prescribed FPR examination. Financial advisors in the United Kingdom are allowed to manage their clients’ money by way of creating a retirement strategy that is based on the client’s long term financial situation and assets. Financial advisors are also allowed to conduct direct financial advice for a client to assist them in setting up a long-term pension or savings plan.