Is a "Financial Advisor" all the finance jobs put into one person?

I see people with the job title "Financial Advisor" advise their clients on future financial projections, accounting manipulation for tax savings, picking stocks, M&A and lots of other finance stuff. While in the meantime, other people only work in one specialization, like CPAs only work in accounting, CFA work only in finance and etc.

It sounds like a "Financial Advisor" is a person who has a CPA, CFA, All the FINRA Series exams passed. All this put into one person when they advise their clients on everything.

Comments (6)

Mar 23, 2022 - 9:21am
Frybird101, what's your opinion? Comment below:

Financial advisor is a really broad title so that's why you're seeing a lot of different roles there. Typically when you see a financial advisor it's someone that manages a clients investment portfolio like in wealth management. Someone like that would not work in M&A because that is corporate finance (although they could still be called a 'financial advisor').

  • Associate 1 in IB - Cov
Mar 23, 2022 - 10:45am

In what capacity is a "financial advisor" involved in M&A transactions lol? The title usually refers to wealth management. Their clients are people, not corporations. 

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Mar 23, 2022 - 1:19pm
innovativeguy11, what's your opinion? Comment below:

We have individuals and corporations as clients and we also participate in the M&A process to some extent. For corporations, we generally provide liquidity management or lending services and can also manage 401k or deferred compensation plans. For individuals we provide investment advice/management, estate planning, tax planning, philanthropy, and business transition services. I am at a large wirehouse so we have a lot of capabilities and wear many hats. For individuals, the main focus is normally growing and/or preserving wealth through investment allocation, tax strategies and the other aforementioned planning areas. We work with many entrepreneurs so here is the process when they are considering selling their business: pre-transaction planning = we help them set up basic estate documents and trusts through an in house attorney, and then, if needed, also connect them with a CPA, M&A attorney, commercial insurance advisor, Tax attorney, or a value advisor (these are people who work with entrepreneurs to help them accelerate the value of a company before a sale). We then have a network of 30 boutique and well known IBs that we vet and make 2-3 introductions to them with the client on a call (vetted by sector, IB experience in said sector, and deal size). The client decides to proceed and the IB he/she chooses and they take it over from there. Post transaction = then we manage the wealth created by the liquidity event according to their needs/wants/wishes and already have the accounts set up so they have somewhere to put the money when the deal closes.

With all that said, it is an inch deep mile wide kind of role where you have to be knowledgeable about many topics so I recommend the CFP designation to learn the broad skills needed in this role. Exit opportunities are not great you pretty much are staying in this business unless you network hard or get the CFA or something.

Edit: Funny enough an advisor on my team that did a lot of the business development with entrepreneurs and pre-transactions planning just left to go work as an associate in a boutique IB. He was very connected with people at IBs through his role here so it definitely helped but still thought it was crazy he gave up his nice salary and 9-5 for that, but it shows it is possible.

Edit 2: Probably should mention we also create financial plans to model these sale transactions on an after tax basis (it helps to know if the sale will be taxed as ordinary or capital gains to get a good estimate but we can also use high, mid and low scenarios to make up for the estimation). It helps clients visualize their net worth and assets on the other side of the transaction. For some people we model a no-sale situation where they instead use the business more as a lifestyle asset. Basically just trying to give them a financial picture of all the scenarios they might consider.

Mar 23, 2022 - 2:33pm
thebrofessor, what's your opinion? Comment below:

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