For many businesses, having a corporate financial consultant is the difference between success and failure. Financial consultants can come in many forms, with each possessing unique skills that can be accessed by business professionals to incite growth and meet objectives.
For those with limited commercial business experience, this may be confusing. Moreover, those without the necessary insights may be questioning why a financial consultant is important at all. We get it.
To reiterate, having the experience and guidance of a financial advisor can help your business thrive and reach unprecedented levels of development. Today, we are going to explore this topic in depth. We want to outline what a financial advisor is, why one is important and the different specialisms that exist. Continue below for more information.
H2: Firstly, What Is a Financial Advisor?
The term financial advisor is broad. In reality, it may refer to a number of different people who have different skill sets. However, establishing a rough definition is a good place to start.
So, a financial advisor is responsible for the delivery of guidance and advice on matters of finance. They may have a wealth of commercial experience, and will use this to generate guidance, analysis and other forms of useful information.
Financial consultants exist in a number of industries, but they are particularly effective in business. This is because companies, typically, deal with large amounts of money, whether through investment or revenue.
There are a number of different financial advisors available, all with different expertise. You may have one consultant who provides investment advice, whilst another may specialise in risk management. As a business, it is your responsibility to select the correct person for the task. You need to decide which areas of the company you feel would be improved through targeted advice and support. From here, a consultant will define goals and generate advice and support that helps you achieve your business objectives.
H2: Are There Different Types?
As explained, the term financial advisor and financial consultant are somewhat interchangeable. Both terms are also broad, as they describe a role with a number of niches. Selecting the right person for the job is important, as one financial advisor may have specific skills that make them unsuitable for the job at hand. Some of the most common types include:
- Investment Advisor
Perhaps you are a business that relies solely on the investment sector, or you are simply looking to expand by making new and unique investments. In either case, an investment advisor will specialise in delivering targeted investment advice and guidance.
Making an investment, especially if you are a commercial enterprise, can be costly if it is done incorrectly. An investment advisor will have the experience and expertise to provide guidance on when to invest and how to invest. Moreover, they will be able to provide an insight into the investments which are most likely to pay dividends based on analysis and observed market trends.
- Financial Therapist
It’s true, a financial therapist is an actual profession! Unlike other financial advisors who rely on data and analysis, a financial therapist will take a human centred approach. Combining financial expertise with psychological principles, a financial therapist will work closely with a client to establish obstacles and hurdles related to finance.
After that, they may delve deeper with the client to explore any held beliefs, ideas or concepts that may be creating said obstacles. The overall goal of this type of advisor is to improve a client’s financial position by generating insights that lead to a healthier relationship with money. A client, for example, may be hopeless at saving. The root of the problem may not be negligence but deeper, which is what a financial therapist will illuminate.
- Risk Management Expert
Businesses of all sizes take risks everyday. Risk is synonymous with business, and calculated, well thought out risks can pay off. Unnecessary risk due to inexperience is negative however, and can erode a business’s ability to achieve sustained growth. You would be surprised at the amount of businesses that experience this.
The responsibility of a risk management expert is to essentially mitigate risk. They will identify risk, perform targeted analysis and provide overall recommendations which aim to reduce risk which could disrupt a company’s financial position. A combination of expertise and analytical tools will be used to provide up to date, unique strategies.
- Financial Consultant
We have spoken about a number of specialisms so far. There are, however, those whose expertise covers a broad range of clients.
A general financial consultant will help guide your business in the right direction, through supportive strategy and planning. They may provide an insight into all of the above topics but lack the specific knowledge to delve deep.
This type of consultant is perfect for business owners who suspect they have an issue or want to explore their options, without hiring an expert who may be unsuitable. General advice and recommendations can be given, as well as market analysis, trend insights and other beneficial information related to finance. They may then encourage a client to enlist the help of other consultants who specialise in a particular area.
H2: Is a Financial Advisor Necessary?
The answer to that question will depend on your specific circumstances and the current financial position of your company.
If you have a great deal of commercial experience and your financial position is stable, and looking to improve, then it may be an unnecessary expense.
However, for those who are failing to meet financial objectives or with limited commercial experience a financial advisor can be hugely beneficial. The experience, expertise and knowledge a consultant possesses will help a business to make smarter financial decisions. Moreover, they will help a client identify problematic areas which may be denying the business the opportunity to meet goals.
Determining whether you require a financial advisor, or someone with a particular speciality, is up to you. In our experience, having an initial consultation with an advisor is a beneficial exercise.