What does a personal financial advisor do?

From U.S. Department of Labor website:
Financial analysts and personal financial advisors provide analysis and guidance to businesses and individuals to help them with their investment decisions. Both types of specialists gather financial information, analyze it, and make recommendations to their clients. However, their job duties differ because of the type of investment information they provide and the clients for whom they work.

• Financial analysts, also called securities analysts and investment analysts, work for banks, insurance companies, mutual and pension funds, securities firms, and other businesses, helping these companies or their clients make investment decisions.

• Personal financial advisors generally assess the financial needs of individuals, offering them a wide range of options. These advisors, also called financial planners or financial consultants, use their knowledge of investments, tax laws, and insurance to recommend financial options to individuals in accordance with the individual’s short-term and long-term goals.

A personal financial advisor’s work begins with a consultation with the client, from whom the advisor obtains information on the client’s finances and financial goals. The advisor then develops a comprehensive financial plan that identifies problem areas, makes recommendations for improvement, and selects appropriate investments compatible with the client’s goals, attitude toward risk, and expectation or need for a return on the investment.

Some advisors buy and sell financial products, such as mutual funds or insurance, or refer clients to other companies for products and services—for example, the preparation of taxes or wills. A number of advisors take on the responsibility of managing the clients’ investments for them.

Last revised August 2007