Financial adviser

A professional who renders consulting services to individuals and households on strategic as well as short term financial planning, investing and budgeting. A financial adviser helps a client maximize net worth by asset allocation. Most financial advisers receive remuneration by commission payments on financial products they broker.

A financial adviser will determine what percentage of the available income is necessary, when taking to account the tax liabilities, in order to meet a minimum balance by the client's target age of retirement. This is a fairly straightforward calculation, and there exist many automated tools to do this. The financial adviser's greatest contribution will be that of asset allocation: determining how to maximize return on investment while satisfying the client's risk tolerance.

Asset allocation is a concept of determining and maintaining a plan of investment in terms of a chosen mix of investments in assets. A large part of financial planning is finding asset allocation appropriate for a given person in terms of appetite for and ability to shoulder risk.

Retirement
One of the major services financial advisers offer is retirement planning. A financial adviser will typically have knowledge in areas of budgeting, forecasting, taxation, asset allocation and financial tools and products in order to establish realistic goals and a strategy which to reach them. In the USA, this will include the use of several investment tools such as 401(k)/401(k) Roth account(s), Individual Retirement Accounts/Roth IRAs, mutual funds, stocks, bonds and CDs.

An Individual Retirement Account is a retirement plan account that provides some tax advantages for retirement savings in the USA.

The 401(k) plan is a type of employer-sponsored retirement plan named after a section of the United States Internal Revenue Code. A 401(k) plan allows a worker to save for retirement while deferring income taxes on the saved money or earnings until withdrawal.

Investing
Because retirement tools enjoying tax benefits, such as deferred wages, will typically have yearly limits on the amount of money to be deferred, and because a client might have more immediate, mid term goals, the financial adviser will also assist with meeting these goals by using less risky and more liquid tools.

Independent Advisers in the UK
Under UK polaristion rules the concept of an Independent Financial Adviser or IFA was born. To be independent of an insurer or other third party interest ensures a client receives unbiased advise. The non independent advisers are company representatives, and may have a conflict of interest. Since 1st December 2004 the Financial Services Authority introduced a new classification of a multi tied adviser who can represent more than one company. Examples of multi tie advisory networks include Intrinsic Financial Services and Openwork.
Independent Financial Advisers or IFAs are professionals who offer unbiased advice on financial matters to their clients and recommend suitable financial products

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