What Is A Financial Consultant? (Tasks And Responsibilities)

Updated 17 March 2023

If you are interested in finance and the economy, you might find a career as a financial consultant a rewarding experience. A financial consultant works with clients to develop a financial plan to meet the client's goals regarding their finances. Understanding the different tasks and responsibilities a financial consultant has may help you decide if this career would be a good fit for you. In this article, we discuss the answer to, "What is a financial consultant?", provide tips on how to become one and explain the responsibilities of a consultant, along with the skills helpful to this profession.

What Is A Financial Consultant?

If you are considering a job in finance, you may benefit from knowing the answer to "What is a financial consultant?". Financial consultants work with clients to develop a financial plan that is appropriate to their financial situation. This may include retirement planning, college funds, refinancing assets and buying and selling assets, among others. To gain an understanding of a new client's situation, a financial consultant may often do a financial audit. Once they understand the client's goals and the means with which they have of achieving them, the consultant and client can create a plan to achieve those goals.

There is a wide spectrum of duties performed by financial consultants. Financial consultants may offer different services depending on the client's situation. Corporate clients may require multiple consultants working together to formulate a plan that takes the complexity of corporate finances into account. People of varying degrees of wealth may request different services not usually provided, such as large charitable donations or complex tax law advice.

Related: What Are Functions Of Financial Management? (With Purpose)

Tips For Becoming A Financial Consultant

Here are a few things to consider when deciding if you want to pursue formal education:

Decide what type of consulting services you want to provide

Financial consultants might specialise in taxes, insurance and investment situations, budgeting, retirement planning, college funds and refinancing. Determining the type of financial advice you want to provide affects how you move forward. For example, if you want to consult with corporate clients, you may move to a large city, seek mentors and research other successful corporate financial consultants.

Consider earning a degree

While a degree is not mandatory to work as a financial consultant, possessing one may provide opportunities that may not otherwise be available. Earning a degree can also provide you with a structured learning environment where you can systemically absorb and retain important information that you may need when you are working. This may signal to future employers that you have formal training and that you are eager to learn about the profession before you enter it.

Seek work experience

Financial consultants are often required to demonstrate that they can provide measured and useful advice to clients. You may gain related work experience by seeking companies or firms that offer internships. These internships may involve working with senior advisors and can last for varying lengths of time, from a few months up to a year.

Cultivating your ability to develop strong networks with clients and offering meaningful advice to them about financial products, such as mortgages and retirement plans can demonstrate you are ready to begin your career. If you want to practice as an independent financial consultant, build work experience by reaching out to people who may put you in touch with prospective clients and offer your services for free or at a reduced rate.

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What Does A Financial Consultant Do?

Financial consultants analyse the entire financial situation of a client. This includes assets, debt, income, dependents and taxes to help clients make informed decisions about their goals. Financial consultants who have earned specialised licenses might also manage investments owned by their clients. Services offered by a financial consultant can depend on the financial situation of the client. Robo-advisors provide automated advice and management of investment portfolios.

Some Robo-advisors also provide different types of financial consulting tools. In-person financial consultants are often the most expensive, but they bring many advantages too. Building a relationship with the same consultant over time may be beneficial, as you can develop an understanding of how they operate and how they react to changes in the market that affect clients' goals.

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Daily Tasks For A Financial Consultant

Here are a few of the most common tasks financial consultants complete and are responsible for each day:

Keeping up with clients

If you already have current clients, your first task is to review any upcoming meetings or relevant information surrounding planning for these clients. Even if you do not have a meeting with one of your clients, it can be a good idea to review their files to ensure everything is on track and to act quickly if you notice something wrong. This can take anywhere from the first hour of your day to a full day, depending on how many meetings you have.

Related: Consultant Roles And Responsibilities (A Complete Guide)

Performing administrative duties

Like many jobs, being a financial consultant entails a moderate amount of administrative tasks. These can vary from tracking expenses to filing reports. It is important to perform these duties efficiently because the more efficient you are at performing them, the more time you may have for interacting with clients. Other administrative duties may include:

  • Record-keeping

  • Updating client records

  • Filing plans

  • Compliance reports

  • Expense tracking

  • Audits

  • Project management logs

Related: Top 20 Finance Interview Questions And Sample Answers

Constantly learning

Whether you have a degree, continuing to expand your knowledge about the profession and industry is important to keep up to date on all the latest trends and ideas in financial planning. Continually learning, both formally and informally, may help you become distinct from your colleagues and contemporaries. As you acquire more credentials and knowledge, you can begin to build a reputation for being a very knowledgeable financial consultant, which can help to attract more clients.

Skills For A Financial Consultant

Here are some skills that may benefit financial consultants in performing their duties efficiently:

Effective communication

Effective communication is one of the most important and comprehensive ways to ensure your clients feel confident in you. Consultants typically possess effective interpersonal communication skills. This means that you are affable and put your clients at ease when you are meeting with them. Your ability to condense and simplify potentially complex information so they can understand it and subsequently make decisions with it is also important.

Your clients are unlikely to have the training and experience you do, so it is your responsibility to explain concepts and data in plain English. Finally, the best consultants typically possess excellent listening skills. Clients rarely enjoy feeling like they are being provided with cookie-cutter information. You can formulate a plan that uniquely fits their needs and goals by actively listening to everything they tell you.

Attention to detail

Financial planning involves analysis, prediction and planning over decades, but it is just as important to be concerned with the little details. Maintaining attention to small details can help to further the shared goal of building a successful financial plan, as you may catch things you may not have caught before. Small details may seem insignificant, but they compound over time and can end up making the difference between success and failure.

Risk assessment

Operating as a financial consultant often requires analysing markets, situations and factors to produce risk assessments. Due to the nature of the economy, all types of financial planning involve some level of risk. Assessing that risk as diligently as possible and presenting recommendations to your clients is one of the most important jobs of a financial consultant.

For example, a turbulent financial market that can influence the success or failure of investments is a risk. Understanding how to anticipate and mitigate these risks may assist you in building trust between you and your clients and attracting new clients as well. Improving your risk-assessment skills is a great way to earn the trust of your clients.

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