| What is an Independent Financial Advisor? Financial Planners consult with individuals or families who are in need of an overall, long term financial plan to achieve their financial goals. The planner will recommend initial investments based on these goals and will manage the investments over time, making strategic changes in consideration of economic factors, risk tolerances, tax exposures, liquidity, cost, and other factors. Financial Advisors consult with individuals or families who have specific financial needs or concerns and recommend products and services that provide solutions to those needs or concerns. Examples would include mortgage or finance related products, retirement income programs, debt management products, insurance related products, tax deferral programs, indexed based investment products and others. Independent Financial Advisors are not tethered to or employed by a specific provider company but, rather can recommend a wide range of products and services from a variety of service providers. The advisor must have a contract with the provider companies in order to offer these products. Often, the advisor will affiliate with an Independent Marketing Organization which provides marketing support, provider contracts, training, product access, and management support in exchange for commission overrides. Because of the financial guarantees offered to the client, some of these products are insurance regulated contracts and require the advisor to have a state insurance license. Other products may be finance type products and have varying state requirements in terms of licensing. Sales ability is not a prerequisite for this position, which more resembles the job of a financial educator or an accountant who, rather than working with numbers from prior years, works with current numbers or "illustrations" based on a set of future assumptions. Financial Planners may be "fee based", receiving compensation direct from the client or may be "asset based", receiving a percentage of the investment values under management. Financial Advisors generally receive compensation from the product and service providers and receive no direct compensation from the client. What kind of financial products and services can an Independent Financial Advisor provide?
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What is an IFA?
