What does a financial advisor do?
Seems like an easy question, doesn’t it?
But as we’ll see, there are many types of “financial advisors” and the advice they give has many different forms, as well as limitations. This is because, believe it or not, anyone can call themselves a financial advisor.
Traditionally, people who worked at the major national firms (Merrill Lynch, Morgan Stanley, UBS, Wells Fargo, Edward Jones, etc.) were called “stockbrokers”. This is because they did just that, broker trades in stocks. They got paid a commission each time a customer bought or sold a stock. Sometimes they would give advice on other aspects of financial planning, but it was incidental to their main business, and they didn’t get paid for it. And obviously, any advice they did give would be biased towards trying to earn more commissions.