What does an Independent Financial Advisor do?

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  • Written By: Alexis W.
  • Edited By: C. Wilborn
  • Last Modified Date: 04 January 2020
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An independent financial advisor is an individual who provides financial planning and/or investment advice to clients. He is referred to as "independent" because he does not have an affiliation with a particular brokerage house. Independent financial advisors can work in a company or organization that offers financial planning or can work independently, establishing their own private clients and doing their own marketing.

Many individuals require assistance when it comes to deciding what to do with their money. It can be hard for people to understand how to plan for retirement or for their children's college education. Knowing how much money they will need, how much to invest, and what to invest in can be daunting for many people, even those who are financially well-off.

Those who need help determining how to manage their money and plan for their future often turn to an independent financial advisor for help. The independent financial advisor usually provides guidance on all aspects of managing money. This can include helping people to create a financial plan; helping people to invest in stocks, bonds, mutual funds and other investments; and even consulting on estate planning.

Generally, an independent financial planner will have a degree in economics or a math-related field. Normally, an financial advisor will also have an MBA or certification as a financial planner or both. These advanced educational qualifications help provide him with the knowledge he needs to help clients plan their finances.


Some independent financial advisors also act as stock brokers. In the United States, normally these individuals will need to have passed their Series 7 tests and/or other tests administered by the Security's and Exchange Commission (SEC) to be licensed to buy and sell stock on behalf of clients. Other countries also have their own rules that people who sell stocks must comply with, so financial advisors working outside of the US will need to comply with the laws in their jurisdiction if they intend to provide investment advice or act as stock brokers for their clients.

An independent financial advisor can perform a number of other functions, even if he does not directly buy and sell stocks or bonds for clients. An advisor can use calculators and tables showing estimated rates of return to help clients determine exactly what they will need to do to accomplish their financial goals. They can even help customers figure out those goals if the client isn't sure of exactly what he wants to do in the future. An independent financial advisor thus acts as a guide to help people use their money wisely.



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