What Is a Financial Consultant? Job Scope, Skills and Salary

By Indeed Editorial Team

Updated 19 November 2022

Published 27 September 2021

The Indeed Editorial Team comprises a diverse and talented team of writers, researchers and subject matter experts equipped with Indeed's data and insights to deliver useful tips to help guide your career journey.

A financial consultant is a type of financial advisor who assists customers in understanding their present financial standing and devising a strategy for all of their long-term financial needs. Financial consultants assist clients in making crucial financial decisions, such as when to retire and how to put funds in their accounts. This profession may appeal to those who are passionate about mathematics and enjoy educating others and developing strategic initiatives. In this article, we answer the question, what is a financial consultant, explain what a financial consultant does and provide the skills you may use in this career.

Related: What Is a Finance Analyst? (With Skills)

What is a financial consultant?

A financial consultant is a certified financial expert who assists clients in understanding their assets and what they want those assets to achieve for them in both the short and long run. These plans contain a range of financial methods incorporating investments, insurance, taxes and retirement planning, with the goal of assisting individuals in preparing for a pleasant retirement and unanticipated financial emergencies. Financial consultants assist their clients in meeting financial objectives by examining budgets, investments, savings and other areas.

For instance, a financial consultant can propose the sort of retirement account to use, advise clients to invest in particular assets and answer concerns about how much to save if a client wants to prepare for retirement but is unsure how. Financial consultants may be able to assist clients with additional specific needs such as tax preparation and insurance, depending on their training, background and certification level.

Related: How To Be a Wealth Manager (With Tips To Advance Your Career)

What are a financial consultant's job duties?

Listed below are some common duties outlining what is a financial consultant:

  • examining budgets and short-term and long-term savings strategies and investment objectives

  • conducting research and investigating various investment options

  • assisting in the estate's management and tax planning

  • offering advice on tax solutions and insurance products that assist clients in meeting their financial objectives

  • providing education to clients regarding investment and insurance choices and the related advantages and risks involved

  • assisting clients in making financial plans for retirement, education and legacy objectives

  • providing financial guidance for important life events, such as having children or marriage

  • supervising client accounts for possible investment modifications to accommodate a change in risk behaviour or enhance financial performance

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What does a financial consultant do?

As a financial consultant, your role is to assist and guide your clients in their financial decisions according to their short-term and long-term objectives. Here are some actions a financial consultant might do when providing a consultant service:

Determine the client's present financial situation

A financial consultant provides clients with a thorough overview of their present financial position, including assets, obligations, sources of income and expenditures, through a one-on-one meeting or a questionnaire. The original budget plan may address these aspects, but it's also critical to understand all income streams accessible throughout retirements, such as pensions and retirement payouts. The complete financial picture can also assist in determining a client's risk tolerance and capacity to expand investments. You're also in charge of counselling clients on the impact of increasing investments or insurance contributions on their tax responsibilities.

Develop a financial strategy

After receiving all the client's financial information, a financial consultant creates a complete plan that acts as a guide for the client's retirement objectives. This action plan details not only the present financial situation encompassing present net worth, liquid assets, existing investment plans, current debt commitments and discretionary income but also includes a step-by-step plan for attaining the objectives outlined in the first interview. The plan includes risk tolerance, health requirements, family details and other areas related to retirement. As a consultant, you assist the clients in selecting the methods that make the most sense for them.

Take immediate action

A financial consultant not only assists in the creation of a solid financial plan or action plan but also in the management of a client's retirement and insurance portfolios. In your role as a financial consultant, you're also involved in the adjustment of investment risks as needed. Based on the client's degree of risk and age, you can propose investment strategies and asset allocations for the total portfolio.

For example, some younger investors are more ready to take risks than older investors, as the younger investor may have more years to cope with fluctuations in the market. As a result, the consultant assists the client in determining asset allocation. This asset encompasses classes such as bonds, target-date funds, equities, money market accounts, exchange-traded funds, REITs (Real Estate Investment Trusts) and cash.

Oversee account administration

Following the implementation of the investment strategy, a financial consultant oversees it and provides frequent account statements to the customer. This may also include holding frequent client meetings to address adjustments to investment strategies or new financial information, such as asset sales, substantial lifestyle changes, significant life events or house purchases.

What skills do you need as a financial consultant?

It's essential that financial consultants possess a wide range of hard and soft abilities, which they acquire through formal education and on-the-job experience. You may consider acquiring and cultivating the following abilities to excel in your role as a financial consultant:

Mathematics

As a financial consultant, you're usually in charge of preparing budgets, investing capital and making other financial decisions. It's essential that you're comfortable working with significant quantities of money. Consider learning about arithmetic theories, money management and basic bookkeeping.

Data analysis

A financial consultant's work also requires extensive research. In your daily role, you're expected to monitor the most recent statistics, developments and trends in financial markets and evaluate that data to make well-informed recommendations. This is essential to favourably influence customers' financial goals.

Organisation skills

Financial consultants frequently work with a diverse range of clients, all of whom entrust the consultant with their financial stability. Financial consultants put forth a lot of effort to manage their calendars and prepare detailed client files that include sensitive financial information. Some financial consultants work closely with clients from various geographic regions who have a wide range of financial demands. It's essential to keep each customer file separately.

Customer service

For financial planners, it's necessary to gain and keep their clients' trust to run a successful financial planning business or secure employment with a firm. To gain trust and build relationships, financial planners use customer service skills like active listening, empathy and kindness. They're also quick to update clients about any potential financial issues, changes or opportunities.

Related: What Does a Financial Planner Do? (With Skills and Salary)

Presentation

Financial planners are responsible for creating strategies, portfolios and budgets and then presenting them to customers for evaluation. The more compelling the presentation, the more likely a customer would gladly accept their financial planner's recommendations. It's critical that financial consultants employ commercial strategies as well as possess good public speaking abilities.

Persuasiveness

You may be in a situation where you persuade your co-workers or superiors about good financial plans and budgeting approaches for the firm or the client. In addition to being persuasive, it's important that you're able to give factual proof to back up your statements. By being persuasive, you establish your authority and display your confidence.

Decision-making

You're required to make difficult decisions in managerial and executive financial jobs, such as budget cutbacks, branch closures and downsizing or investment decisions that might either hurt or improve the company's finances. Making decisions confidently displays your capacity to make informed business judgments. This also greatly affects your client's financial standing.

Attention to detail

As a financial consultant, it's essential that you possess robust detail orientation since most of your work includes evaluating and assessing investment options and recommending such data to clients. It's essential that you're able to spot inconsistencies in investment data, client data and errors in accounting computations. It's important to be cautious in your work.

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What is the work environment of a financial consultant?

Financial consultants can work for businesses or as independent contractors. Financial consultants frequently work in corporate offices when employed by financial businesses. When working independently, financial consultants may work from home or rent an office space. Independent financial consultants can also meet customers in public areas, as well as in their own homes and offices. Financial consultants usually work full time and may work beyond regular work hours to suit the demands of their clients or to fit their schedules. In certain situations, you may work in the evenings and on weekends.

Related: How To Become an Independent Financial Advisor

How much do you earn as a financial consultant?

The national average salary for a financial consultant is $65,832 per year. Be mindful that this figure is highly dependent on your level of education, experience and expertise. It also depends on the size and type of company.

Related: 8 Wealth Management Specialist Certification Options to Explore

Salary figures reflect data listed on Indeed Salaries at the time of writing. Salaries may vary depending on the hiring organisation and a candidate's experience, academic background and location.

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