How to Be a Professional Financial Advisor and Its Advantages

Do you know the purpose of having a financial advisor? They will help you with any difficulties in your financial planning. This article will inform you all about the financial planner.

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Financial Advisor

Job as a Financial Advisor (or likely to be called Financial Planner) is probably new in Indonesia or other developing countries rather than in the more developed ones.

However, along with the economic and business growth, the demand is increasing.

Have you met any financial advisor before? If you haven’t, this article will explain the advantages you can obtain from financial planner services, their responsibilities, where you can find them, and how to be one of them.

So let’s check this out!

Advantage of Hiring a Financial Advisor

Maybe you are wondering, “does it help to ask the advice from a financial advisor? What advantage can I obtain from their service?”

Let’s take a look at some benefits of hiring financial consultant service.

#1 Financial Analysis

A financial advisor will give a comprehensive analysis of your current financial condition and financial report such as; the number of your liabilities (debts), the amount of net worth, etc.

From the report, you’ll figure out whether you are healthy financially.

#2 Financial Goals

After analyzing the current condition of your finance, a financial advisor will then help you plan your finance according to short-term and long-term goals.

They will make priorities to reach within a certain period of time for each objective based on the analysis.

#3 Strategies

An advisor will give financial strategies such as options of investment and insurance to choose so your financial goals can be achieved.

You can download an ebook from Finansialku to help you start your investment. Download it here for free.

#4 Risk Management

As you will encounter some risks regarding your financial strategies, your advisor will also help managing risk that occurred in every investment or insurance option you have made.

Especially if you have a pretty bad issue with personal or business funds, such as debts or cash flow problems.

Hiring a service from Financial Advisor is another way to give you the proper analysis, solution, and strategies.

If you want to find out your financial health, you can use Finansialku apps or you can talk to one of our financial planners here.

How Financial Advisors Work?

Many of financial market actors such as insurance agents, stockbrokers or bankers claim to have the best advice for clients, but not all of them obtained a comprehensive training along with the experience to devise a financial plan.

Therefore, it is important to consider a planner who has a CFP (Certified Financial Planner) title before you hire the service.

In Indonesia, the professional certificate for financial planners is issued by Financial Planning Standards Board (FPSB).

When you hire a professional Financial Advisors, the first meeting is usually started with the introduction of the consultant to the client.

A planner will ask you some information about your current financial condition and what goals you want to achieve ahead.

They will also ask your personal information such as; status, investment profile, current job, dependents, etc. Usually, after the interview, a planner will formulate a timeline for the client’s financial goals.

Then the consultant makes a conclusion such as the number of debts, assets, saving percentages, investment portfolio so that your short-term and long-term goals can be achieved.

How to Find a Financial Advisor?

Within a second, a list of Financial Advisors or Planners will pop out on your computer or android screen with the help of the internet. You can also search through, website, blog, or book.

But, maybe you are doubting the resources, and thinking “how can I get not only a professional but also a trustworthy consultant?”

Yes, it is necessary to think that way. With many pieces of information flowing through, you need to be able to discern the right planner.

And this is the money you get through hard work, sure you won’t let untrustworthy consultant help you with your financial issues, would you? Just because a consultant has a professional certification with a certain degree, doesn’t mean he/she is trustworthy, even if he/she has a legal certification.

To help you find a credible consultant you can check this website fpsbindonesia.com.

Along with that, as a client, you can interview several consultants with these related questions, and that is how you find out the one who is credible and professional.

#1 Type of Financial Planners

Look for the profile of a consultant that is in line with your financial need and goals. Be sure their profile is fit with your risk tolerance. For example, if your type of investment is moderate, look for the one who can moderately manage your investment.

#2 Type of Clients

Check if the consultant has a certain criteria for a client, such as total of net worth, the business types, the investment instruments, etc. So be sure you meet the qualification as a client. And you know that he/she can work maximally for you.

#3 Experiences

When a consultant has many experiences, trustworthy, work maximally, and meet your risk criteria, he/she is the right consultant for you.

#4 Personal Qualifications

Find out if a consultant has deep passion for finance and legal authority to do his/her duty as a financial planner. It is a plus point for a client if a consultant has other related-skills such as investment, retirement plan management, tax, insurance, etc.

Please watch a video from Finansialku more about a financial planner!

#5 Service Fees

If the fees are based on tariff, or the price to pay for a certain amount of time such as per hour/day, then a consultant will not get a commission from the transaction such as in an investment or a property.

Therefore, ask how your consultant wants to be paid, whether with tariffs or via commission.

Tariffs for each consultant is different, the range can be varied from Rp 300.000 to Rp 750.000 per hour. Make sure you know clearly about the tariff before making a deal with the planner.

#6 Violation

There is an ethics code for every consultant with CFP certification. A consultant should not recommend a financial or investment product because of his/her personal interest.

How to Become A Professional Financial Advisor

With a decent tariff and commission, building a career as a financial planner is promising, especially the demand of Indonesian people for consultant service is rising.

In Indonesia, this job has been growing since 2010. Along with that, people are more literate financially and need more financial planner services.

The Profession as A Financial Advisor

So what is the profession of a financial planner?

It is a profession to assist the clients to achieve their financial objectives, professionally.

The task is to help a client achieve short, middle, and long term financial goals.

The common stages in personal finance are financial security, financial comfort, and financial freedom.

A consultant will analyze a client’s financial position or condition, and from there, he/she will help the client to reach financial goals in each step.

Why A Client Needs A Financial Advisor

So you ask “why do I need the service of an independent financial planner?” Here is why.

#1 Middle Class

The middle class in Indonesia is growing.

#2 Family with Double Income

Families with double income, where the husband and wife are working, is rising.

#3 Access to Financial Products

Financial products vary from paper assets, real assets, and digital assets, to insurance, and other financial products. People can access them easily.

#4 Growing Needs of Indonesian Society

The Financial needs of Indonesian society is rising. Besides the living standard and cost are more expensive. Therefore, the need to make a financial plan such as buying a house, education, insurance, emergency fund, or retirement fund is rising as well.

Scope and Function of A Financial Advisor

If you really want to know the work of a financial advisor, here are some scopes that a planner need to master.

# Cashflow

# Individual Taxes

# Insurance

# Retirement fund

# Education fund

# Major Purchases (buying house, vehicle, wedding, vacation)

# Wealth Distribution (inheritance, estate, grant)

# Investment Products

Two Types of A Financial Advisor

Financial planners can be categorized into independent financial planners and the dependent financial planners.

#1 Independent Financial Planners

They are not tied to any financial institution. If you chose this type, you’ll be paid based on your consultation services.

For example, you give consultation about education fund and business plan to a client, and you’ll get the fee from the services.

#2 Dependent Financial Planners

This type of consultant works for a financial institution such as a bank, insurance, asset management, security, retirement fund, property agent, etc. For example, you work as a banker who handle a wealth of a client.

You can look for how a financial consultant work according to professional standards in Indonesia in this link fpsbindonesia.com.

Is it difficult to be a financial planner in your opinion?

This depends on your effort, experience, and how you develop your skill and specialty as a financial planner.

If you are interested in becoming a professional financial planner, at the end of this article, you’ll find out the process you should take.

Advantages of Being A Financial Planner

There are at least two kinds of advantages you can receive as a financial advisor. First, financial benefit. You’ll be paid for your consultation service that depends on your tariff, and contract with a client. The form of payment can be tariff or commission.

Second is a non-financial benefit. You will gain satisfaction that is more valuable for helping a client to solve financial issues. A planner can help an employee, businessman, or freelancer, or a family to achieve the financial goals and prevent problems in their finances.

How to Become A Financial Advisor

If you want to be a financial planner, here are five things you should have.

#1 Obtain Professional Certificate

A professional, and credible consultant who could have many clients must have a professional certificate. In Indonesia, the institution that issues this official certification is Badan Nasional Sertifikasi Profesi Certified Financial Planner, CFP®.

#2 Skill in Communication and Human Management

As a planner, you also need to have good communication and management skills, as your client will have different professions and backgrounds.

#3 Update with the Latest Financial Development

Follow the latest development of finance such as financial regulation, products, or investment strategies is necessary to help deal with the client’s issue.

#4 Having Specialty in The Financial Area

Developing a specialty will help you gain perspective clients that suit your specialty. You can choose one of many scopes in a financial planner that has been mentioned in point number 3.

#5 Experiences and Ethics Codes

A professional planner is experienced in financial plan, issues, and obey the ethic codes as a consultant.

Three Ways to Obtain Certificate as A Financial Planner (CFP)

Now, here are three stages to be a professional planner.

#1 Preparation Exam

To obtain a CFP certificate, you need to take an exam issued by The Financial Planning Standard Board (FPSB) of Indonesia. But you can join the exam if you pass the preparation exam conducted by this board. The preparation exam is about the science, and knowledge in financial planning.

#2 Exam

After you passed the preparation exam, then you can join the certification exam done by FPSB of Indonesia. You can look for the exam schedule on its website.

#3 Experiences

You need to have experiences in financial area. For example working in financial institutions such as in a bank, insurance, asset management, or other financial industries.

Conclusion

To be a financial planner will be easier if you have a mentor who is an active financial planner.

If you are a practitioner in the financial industry or college students who are interested to be and want to know more about the profession of a financial advisor, you can contact our WhatsApp.

May this article answer your questions about the financial planner. And hopefully, you can practice the steps to be a professional, and credible financial planner.

Tag this article to your friends who are looking for or want to be a financial consultant.

References:

Admin. 2019. Apa Itu Jasa Konsultasi Perencana Keuangan? Dimana Carinya? Dan Apakah Menguntungkan?. Finansialku.com – https://tinyurl.com/yb3883xs.
Melvin Mumpuni, S.T., M.B.A., CFP, QWP. 2018. Bagaimana Cara Menjadi Perencana Keuangan yang Dipercaya, Professional dan Memiliki Banyak Klien. Finansialku.com – https://tinyurl.com/ybarxuhu.

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How to Be a Professional Financial Advisor and Its Advantages

Financial Advisor