A independent financial adviser, is a professional who renders financial services to individuals, businesses and governments, also helps people deal with various personal financial issues through proper planning. This can involve investment advice, which may include financial debt management tips, and/or advice on life insurance and other insurances s, and/or advice on mortgages.
Ideally, the independent financial advisor helps the client maintain the desired balance of investment income, capital gains, and acceptable level of risk by using proper asset allocation. Independent financial advisors use stock, bonds, mutual funds, property investment, options, futures, notes, and insurance products to meet the needs of their clients. Many independent financial advisers receive a commission payment for the various financial products that they broker, although “fee-based” planning is becoming increasingly popular in the financial services industry.
A further distinction should be made between “fee-based” and “fee-only” advisers. Fee-based advisers often charge asset based fees but may also collect commissions. Fee-only advisers do not collect commissions or referral fees paid by other product or service providers.
Some investment advisors only charge a fee based on the assets managed for the client. Typically they charge about 1.0 to 1.5% per year to make the investment decisions for the client. They do not collect commissions.
The work engaged in by this professional is commonly known as personal financial planning. In carrying out the planning function, he is guided by the financial planning process to create a financial plan; a detailed strategy tailored to a client’s specific situation, for meeting a client’s specific goals. The key defining aspect of what the financial planner does is that he considers all questions, information and advice as it impacts and is impacted by the entire financial and life situation of the client.