Financial Analysts and Personal Financial Advisors

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Investor Economic and Financial Education

Financial Advisor and Investment Advisor

Financial advisors generally take a long-term view of your investment horizon. They're trained to help you make objective decisions based on your specific financial goals. The truth is, a financial advisor can potentially make a big difference in your investment results.

On their own, investors may act on emotion rather than information buying and selling based on good and bad news in the media. Your financial advisor can encourage you to stay on course during uncertain times or discourage you from paying more than may be warranted for an investment.

Why Use an Investment Advisor?

A Qualified Professional Can Help You:

Determine your long-term financial goals

Screen out funds that do not match your objectives

Assess risk tolerance

Research funds that meet your requirements

Determine asset allocations

Understand the risks and potential rewards of investing

Monitor investment performance

Review investment needs on a continual basis

Make decisions in difficult markets on an on-going basis

Answer questions, provide advice and reassurance

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 assess the economic performance of companies and industries for firms and institutions with money to invest. Personal financial advisors generally assess the financial needs of individuals, offering them a wide range of options.

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. Financial analysts read company financial statements and analyze commodity prices, sales, costs, expenses, and tax rates in order to determine a companys value and to project its future earnings. They often meet with company officials to gain a better insight into the firms prospects and to determine its managerial effectiveness. Usually, financial analysts study an entire industry, assessing current trends in business practices, products, and industry competition. They must keep abreast of new regulations or policies that may affect the industry, as well as monitor the economy to determine its effect on earnings.

Financial analysts use spreadsheet and statistical software packages to analyze financial data, spot trends, and develop forecasts. On the basis of their results, they write reports and make presentations, usually making recommendations to buy or sell a particular investment or security. Senior analysts may even be the ones who decide to buy or sell if they are responsible for managing the company's or clients assets. Other analysts use the data they find to measure the financial risks associated with making a particular investment decision.

Financial analysts in investment banking departments of securities or banking firms often work in teams, analyzing the future prospects of companies that want to sell shares to the public for the first time. They also ensure that the forms and written materials necessary for compliance with Securities and Exchange Commission (SEC) regulations are accurate and complete. They may make presentations to prospective investors about the merits of investing in the new company. Financial analysts also work in mergers and acquisitions departments, preparing analyses on the costs and benefits of a proposed merger or takeover.

Source: Department of Labor (

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