Financial consultant | Types, Licences & Job description

Want to learn more about what does a financial consultant do? In this post, we deep dive into types of financial consultants and how much they make, among other things. Read on!

Financial consultant

A financial consultant analyzes and audits your current financial situation and devices a strategy to reach your financial goals. Consultants usually cater to a clients’ specific needs and goals. They offer services like investment, tax preparation, retirement plans, and insurance service. In this blog, we explain what is financial consulting? What do consultants do?

What is finance consulting?

What is financial consulting? A financial consultant can work with firms or as a self-employed contractor. When a financial consultant meets a client, they evaluate the financial situation before making concrete suggestions. Ideally, clients should meet their advisor whenever there is a life change, to reevaluate their finances.  

Consultants offer personalized advice to clients to increase their wealth. Financial consulting services may include – buying and selling investment products, financial product and insurance schemes, and financial planning to meet your financial goals. Depending on their qualifications they may offer services like business and divorce planning.

Also read: Reddit personal finance | 21 Best Subreddits on Personal Finance

Financial advisor vs financial planner

Differences between a financial advisor vs financial planner are as follows

Financial planners are professionals who help individuals meet their long-term financial goals. They adopt an integrated approach with budgeting, saving, investing, and retirement planning and rely on strategic portfolio allocations for investments. Financial planners may have different certifications e.g. fiduciary-based financial planners need to be Registered Investment Advisors.

Financial advisor is a broad term used to describe professionals who help people manage their money. Advisors may help people manage their investments, broker the sale and purchase of stock and funds, or manage the estate and tax plans. Registered financial advisors need a carry a Series 65 license to operate.

What is a financial advisor?

What is a financial advisor? Financial advisors strategize with individuals or companies and help them reach their financial goals faster. They help their clients create wealth, reduce costs, and eliminate debt, and their services can include – investment management, tax planning, insurance services, and estate planning. Advisors make a financial plan based on their client risk appetite. Registered advisors need a Series 65 license to operate and may require additional licenses, depending on the services they provide.

What is a financial planner?

What is a financial planner? A financial planner helps clients meet their current monetary requirements and make plans to meet their financial goals. They adopt a structured approach to help their clients make better financial decisions. Planners use their knowledge of – budgeting, taxation, and investment with various analytical tools to offer financial suggestions and help their clients make informed decisions. Financial planners may specialize in one area or have a more holistic approach.

Also read: 25 Essential questions to ask a financial advisor | Know your advisor

What does a financial consultant do?

You may wonder what does a financial consultant do? A consultant role is not limited to investments but helps clients in savings, budgeting, insurance, and tax savings. The financial consultant takes a holistic view of the clients’ finances. They account for their client’s debts, assets, expenditures, and earnings and work with them to set financial goals and help them understand what it entails.

Financial consultant job description

The financial consultant job description can vary depending on their specialization. They help their clients achieve their financial goals and advice them on taxes, investments, retirement planning, and insurance. A financial consultant responsibilities include –

• Analyze client information and strategize to help them achieve long and short-term financial goals. 
• Provide sound financial advice based on the income, risk appetite, and desired level of investment growth.
• Evaluating how changes in life status and finances can affect their customer’s financial goals. Modify their advice and strategies to meet these changes.
• Monitor financial markets and economic conditions
• Research different investment options for clients.
• Make financial reports for their clients and respond to any queries if any. 
• Meet statutory requirements.
• Stay updated with the latest financial instruments and regulatory changes. 
• Look for new clients through emails, advertising, and cold-calling.

How much do financial consultants make?

Are you interested in learning how much do financial consultants make? The average annual salary of a consultant in 2020 was $89,330. The top 25-percent of financial consultants made $157,020 annually, while the bottom 25-percent made $59,450. The salary of a consultant varies by state and experience. 

• Entry-level consultants – $53,000 annually
• Mid-level consultants – $ 77,000 annually
• Senior consultants – $83,000 annually.

A freelance financial consultant earns $73690 a year.

Also read: How many stocks should I own for an ideal portfolio

Day in the life of a consultant

The average financial advisor’s day generally starts early and can run late in the evening, especially at the beginning of their careers. The day in the life of a consultant will include –

• At the start of their career financial advisors will spend some part of their day looking for new clients. They meet prospective clients, make cold calls or network.
• Consultants need to spend a large part of their day servicing their customers. They review client portfolios, address queries, and attend to other business issues.
• Consultants perform administrative chores – compliance reports, entering data, updating client records, and record-keeping.
• Many securities and financial instruments require approval and may require further training. Advisors may spend time in continued training.

What does a consulting firm do?

What does a consulting firm do? Financial consultancy services include helping individuals and small businesses manage and increase their wealth. The role of a consulting firm is varied.

• Financial forecasting based on present and future earning potential.
• Assess the financial health of the companies.
• Help firms define their goals by identifying opportunities and improved financial planning and targeted performances.
• Advice on selling and buying bonds and stocks.
• Ensure financial compliance.
• Determine latest market trends
• Identify risks and opportunities for investment.
• Review day-to-day operations and recommend areas of improvement.
• They may provide financial advisory consulting if required.

Also read: How can you reduce your total loan cost | Paths to debt-free life

Types of financial consultant

Hiring a financial consultant is a great way to manage your money, set financial goals, and make retirement plans. While financial advisors must be registered with the US Securities and Exchange Commission or their state, other financial titles need not be registered. Investors must be careful while selecting a financial consultant. You need to identify the kind of advisor you need. We recommend you verify your financial consultant before hiring them. Here are some types of financial consultants available.

1. Personal financial consultants 

A personal financial consultant gives financial advice and services to their clients. They provide customized solutions to their customer’s unique needs and help them mitigate risks and evade financial mistakes. They offer products and services based on your current and future requirements. Consultants either ask for a flat fee or take a commission from the sale of investments.

2. Financial strategy consultant 

A financial strategy consultant assists businesses in defining financial strategies, taking into account industry trends. The consultant studies company operations and helps implement new financial target models. They help improve their client performance, reporting mechanisms and develop predictive models. Work with companies during mergers and acquisitions.

3. Investment consultant 

An investment consultant is a financial professional who provides clients with investment products, advice, and planning. They make investment strategies for clients, monitor their investments, improve their finances, and help the clients meet their financial goals. Investment consultants may work for banks, investment firms, or independently. The consultants often develop long-term working relationships with their clients.

4. Accounting consultant 

Accounting consultants work with individuals or companies for financial management, auditing, and forecasting. The consultant helps to create and analyze financial documents and recommend areas for improvement. They help their clients predict future costs and revenues and ensure compliance with regulators. Accounting consultants require a background in finances, regulation, and accounting procedures.

Also read: Stock Consultant | How to become a stock consultant

5. E-trade financial consultant 

E-trade financial consultants provide investment recommendations, portfolio building recommendations, and review and analyze your current investment with the latest tools. 

They buy stocks, bonds, and securities on your behalf. Firms are increasingly going digital-first platforms and the e-trade financial consultant provides the human interactions and advice required on these platforms. Younger clients are getting attracted to the new platforms.

6. Corporate finance consulting 

Corporate finance consulting role work in a client-facing role with corporate around the world. The consultant has expertise in the areas of finance and corporate strategy. Corporate finance consultants may work as a part of the due-diligence team in mergers and acquisitions team They may work in diverse areas like IP development, reconstructing, and marketing.

7. Loans consultant 

Loan consultant assesses loan application. Their responsibilities include obtaining information from loan applicants by interviewing them. They analyze the applicant’s financial status and review loan agreements. The loan consultant informs the applicant about different loans and credit options. They typically work in financial institutions, businesses, and help clients with home, business, mortgage, consumer loans.

8. Business financial consultant 

Business financial consultants in companies act as conduits between internal financial functions and frontline commercial teams. They translate internal financial data and targets into commercial insight. They participate in budget preparation activities, review accounting procedures, and recommend improvements.

9. Chartered financial consultant 

Chartered financial consultants or ChFC have completed a comprehensive course of financial education, examinations, and practical experience. Some colleges grant the designation after a candidate has completed seven required courses and two electives. Charted financial consultants usually have at least 3 years of experience in finance. ChFC needs to continue education credits to maintain its credentials.

Also read: Liquidity Ratio | What are liquidity ratios, how are they calculated?

10. Financial planning consultant 

Financial planning consultants take a holistic approach while providing financial advice to their clients. The planner includes budgeting, emergency savings, college funds, insurance, retirement plans, and estate planning. Financial planners may sell investment or insurance products. They can be Certified Financial Planners or CFPs who had extensive training and knowledge and cleared certification exams. CFPs work as fiduciaries for their clients and work on a fee.

11. Finance management consultant 

Financial management consultants analyze data and transform it into actionable insights to help companies to operate more efficiently. They advise their clients and respond to strategic questions regarding financial and operational data. They analyze financial processes recommend improvements in operations to increase efficiency. Financial management consult helps their company undergo a lifecycle like M&A processes or reconstructing.

How to become a financial consultant?

Financial consultant works with their clients to make better financial decisions. After analyzing their client’s financial goals and needs, financial consultants make recommendations to achieve their goals. The financial consultant should be trustworthy and share a transparent relationship with their clients. If you are interested in becoming a financial consultant, you need to have a gift for numbers and enjoy analyzing financial markets. Here is how you can become a financial consultant.

Financial consulting career path

The financial consulting career path is challenging but rewarding. They typically have a bachelor’s degree in finance, statistics, economics, or other finance-related fields. Some firms require their consultants to have masters in business administration. Most certification programs require financial consultants to acquire some experience.

Most financial advisors start working in junior positions or internship positions. Bigger firms have a more robust training program. There are various specialization consultants can pursue. Some consultants reduce their interaction with their clients and concentrate on managing their accounts. Depending on the size of the firm, financial consultants may pursue management positions. Many advisors start their firms.

License to be a financial advisor

There are no specific licenses to be financial advisors, they need licenses to sell investment products. Here are some common licenses required by financial advisors –

• Series 6 License – The Financial Industry Regulatory or FINRA administers the series 6 licenses. The license allows advisors to sell security packages like mutual funds and variable annuities. 
• Series 7 License – The FINRA also administers the series 7 licenses. It is considered to be a more comprehensive license and allows them to sell stocks, bonds, options, and futures. 
• Series 3 License – The license allows consultants to deal in commodities.
• Series 63 License – Financial advisors need a Series 63 license to conduct business. Consultants must pass an additional exam to series 7 or series 6 exams. 
• Series 65 License – Financial advisors who charge a commission must obtain a series 65 license.

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Financial consultant resume

The financial consultant resume section should ideally have the following sections –

• Headers
• Professional summary
• Experience
• Relevant Skill
• Education
• Certifications

While writing the resume you should mention the skills prove they are looking for. You should be able to demonstrate financial and investment expertise, excellent communication, networking skills, sale orientation, computer skills, and time management.

Independent financial consultants 

The most common path to becoming independent financial consultants is working as an investment advisor representative or IAR at another firm. Consultants generally try to gain some valuable experience working under an experienced IA. Consultants generally try to work with some or all their existing clients in their new firm. Consultants have to build up a rapport with their clients and may like to continue to work with them. They can gradually increase their client base. It is essential independent consultants pass the Series 65 or Series 7 exam. We recommend you establish LLC to separate business or personal assets. 

Starting a financial consulting business

Starting a financial consulting business can be daunting. Here are our top tips –

• Starting any business is expensive. You need to factor in the costs of furniture, rent, advertising, technology, utilities, etc. 
• Financial consultants need to ensure they have the appropriate licenses to operate. You can consider professional designations like Certified Financial Planner. These credentials can give your business the required credibility. 
• You need to map out your business plan. These include – business goals, financial consultancy services you plan to provide, strategies you will adopt, the demographics of your clients, flexible market plan, and probable costs. 
• Establishing professional relationships is an essential part of the business. You may need partners- an attorney or CPA in your business. If you have just started you may need a mentor to guide you in the beginning. You will need an effective support team to help you operate.
• Starting a business is risky, you need to know the risks and liabilities it entails.

Also read: Legal consulting | Top 7 types of legal consulting firms

Top 15 financial consulting firms in the world

Most of us have heard of the top financial consultant companies. Several other companies can give your career visibility. We have listed the top 15 financial consulting firms in the world below –

1. McKinsey
2. Boston Consultancy Group
3. Bain and Company
4. Accenture
5. Oliver Wyman 
6. Grant Thornton LLP
7. Booz Allen Hamilton
8. Deloitte
9. PricewaterhouseCoopers
10. Ernst & Young 
11. KPMG
12. L.E.K. Consulting 
13. Roland Berger
14. FTI Consulting Inc.
15. Alvarez and Marshal

Financial consultants: Common questions

Whether you are interviewing for a job or by a prospective client or looking for a financial consultant of your own, it is important to be prepared. If you select the wrong consultant to manage your finances it can be disastrous. If you are unprepared for your interview you can lose a job. We have compiled some common questions for your convenience.  

Do you need a license to be a consultant?

Are you wondering, do you need a license to be a consultant? The financial consultant requires specific licenses on products or services they provide. Some common licenses for a consultant are – 

• Series 6 license
• Series 7 license
• Series 63 license
• Series 65 license
• Series 3 license

You can explore additional certifications and become more competitive. The two common certifications are –

• Certified Financial Planner
• Certified Public Accountant

What is Chfc?

The American College of Financial Services offer Certified Financial Consultant certification. To get the certification students need to clear eight courses covering different facets of financial planning and require at least three years of relevant work experience. A Chfc certification is useful in insurance and finance sectors.  They provide financial planning services including – income tax, retirement, risk management, estate planning and investment.