Financial Consultants: Why You Should Consider Consulting Them

Find out in which situations financial consultants can be useful, how much their services cost, where to find good specialists, and whether you can safely rely on their recommendations.

What a Financial Consultant Does

A financial consultant helps people manage their personal budgets and achieve financial goals. They analyze clients’ income and expenses, advise on how to save money, and select options for growing savings — such as deposits, insurance, investments, and pension fund contributions.

All this can be done independently. For example, you can create a list of financial goals, prioritize them by urgency and importance, determine how much you need to save, and learn to identify unnecessary spending.

However, if this seems too complicated or you simply don’t want to deal with the details, it makes sense to turn to a professional.

A good specialist takes into account the features of different financial instruments and chooses those that best match your objectives. They may suggest solutions you haven’t even considered.

A consultant also factors in taxes, inflation, and intermediary fees — for example, those charged by brokers. If you plan to make money on the stock market, you’ll need a financial consultant who holds the status of an investment advisor. Only such a professional is legally allowed to give recommendations on selecting securities.

To begin, an investment advisor must determine your investment profile — that is, how much money you intend to invest, for how long, what level of returns you expect, and what potential losses you are willing to accept. Only then will they suggest suitable assets for you.

How to Make Sure the Consultant Is Reliable

Find out about their education and experience, and look for client reviews online. Be very attentive during your interactions. You should be cautious if the specialist:

• Provides services without a contract, especially if they are an investment advisor;
• Does not clarify your goals or your risk tolerance;
• Promises high returns in a short period of time;
• Guarantees profits from investments and does not warn about possible losses;
• Advises investing all your savings into very risky instruments, such as cryptocurrencies;
• Fails to give clear answers to your questions and instead speaks in vague terms filled with jargon;
• Tries to persuade you to give them your money so they can invest it on your behalf.

Such behavior indicates that the consultant is either unqualified or acting in their own interest rather than yours. It’s also possible they are a scammer.

In reality, it is impossible to guarantee profitable investments. High returns always come with an equally high risk of losses.

Even if you are ready to take financial risks, you should never bet all your savings on one opportunity. And if you are thinking about stepping away and entrusting everything to professionals, remember that only licensed trust management companies have the legal right to handle clients’ finances.

The Most Important Thing About Working with a Financial Consultant

The consultant is responsible for their recommendations only in one specific case — when they are a certified investment advisor and are selecting securities for you.

If an investment advisor fails to determine your investment profile, suggests unsuitable assets, or does not warn you about risks — and as a result, you lose money — you can demand compensation through the court. In all other cases, you follow their advice at your own risk: if you lose your savings due to the intermediary’s mistake, you won’t be able to hold them accountable or recover your losses.