Financial consultants are self-employed firms or institutions
which provide professional advice on financial planning and
financial management. Financial consultants offer analysis and
guidance to businesses and individuals in making investment
decisions. They add value to an individual or individuals and
family, by helping them lay out what their overall needs are and
articulate their goals. Financial consultants cannot make the goals
up but help the client to understand how their finances can help
meet those goals. Financial consultants assess the economic
performance of companies and industries for firms and institutions
with money to invest.
Need for financial consultants:
The help of financial consultants may be required almost always. The
advices from financial consultants have proven to be realistic
during the years of bad markets that we had during the years
2000-2003. Before 2000, we had amazing markets and there were a lot
of people investing over the internet and online and getting
short-term profits. People thought that there really wasn't a need
for financial adviser or financial consultant because of how well
they could do on their own. However, that period of boom ended in a
big bust. The majority of clients, who followed the advices from
financial consultants or had a good sound financial plan, didn't
suffer during the downtrend. But those without the advice and
guidance from the financial consultants had strained their finances
resulting in a huge loss. While, an appropriate financial planning
is a roadmap towards success, the financial consultants are the one
who chart this roadmap.
Why do people avoid financial consultants?
There are three practices that are prevalent, when it comes to
taking financial advice of the financial consultants:
• Many people believe that only they can plan their own finances.
They think that reading a few books/business magazines/newspapers,
browsing through financial websites and watching some business
channels are more than enough to make investment decisions.
• Even when an agent is involved, they expect him to pass some
portion of the commission he or she earns.
• To hire financial consultant services by paying them fees, just as
they would do for a doctor or a lawyer or an accountant etc., is
practically unheard of.
It is important to appreciate the fact that the investment world is
huge which comprises of shares, mutual funds, bonds, post office
schemes, credit cards, home loans, insurance etc. Each investment
module has its benefits, drawbacks and typical terms and conditions.
It is difficult for an ordinary person to behave extraordinarily in
every circumstance. In fact, even an advisor would usually
specialize in some specific fields only.
Hence, when lakhs of hard-earned money is at stake, it is not
advisable to save a few thousands of rupees in advisory fees of
financial consultants. Good interpersonal skills and ability for
working with numbers are among the most essential qualifications for
financial consultants. Intense competition is anticipated for these
highly paid positions, despite rapid job growth; those who have
earned a professional designation or an MBA are expected to have the
best opportunities to earn as a financial consultant. .
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