What is a Financial Advisor?

What is a Financial Advisor?

The term Financial Advisor has no specific designation, certification, or meaning. It is an umbrella term, meaning it is used to cover all sorts of services. Ask any fifth grader or an adult what a financial advisor is. Mostly likely, they will say – a person who gives financial advice. Makes sense right? Well kind of. The title is very misleading and extremely generic.

Take 1 minute to read an excellent explanation here.  https://www.investopedia.com/terms/f/financial-advisor.asp

If you ever encounter a Financial Advisor, ask them what their rates are and how they are compensated for their “Financial Advice”. If you can’t get a quick answer, now you understand why it is misleading.

If your job was to give financial advice, it would make sense you charge a clear rate for your services. However, if your job is to offer Financial Advice about buying financial products you sell, well you should probably describe what you sell and how much it costs. A Financial Advisor may offer excellent services and Financial Products, but you should have a truthful conversation about what you are buying. It is simply the right thing to do.

This is why BasicMoneyTalk uses the term Financial Coach. We offer Financial Coaching and advice.  We charge a flat hourly rate for this service.  We do not sell products or recommend any specific products. In fact, In Massachusetts, you have to be a Registered Investment Advisor just to recommend specific Investments in exchange for your money.