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You may save and spend money more wisely at work and in your personal life by setting financial objectives. Over time, these goals can assist you in debt reduction, lifestyle enhancement, and retirement planning. You may make a financial plan that works for your lifestyle by learning more about these objectives.

Financial services is a broad phrase that covers a wide range of services. The financial industry offers a wealth of chances for applicants to discover their ideal match. The alternatives are numerous and diverse, ranging from banking to investing and beyond.

Thus, in order to determine which career path best matches you and your goals, you should first gain an understanding of the extent of the financial services business.

Financial ambitions are crucial because they may support your lifestyle and enable you to achieve your career and personal goals. Separating them into short-, medium–, and long-term goals is beneficial. Short-term financial goals include paying off debt, opening a savings account, and making a budget that fits your spending plan. Long-term planning for retirement and financial stability are important areas to concentrate on. The following are some advantages of setting financial goals:

  • It can lead to financial freedom.
  • It increases your chances of having a comfortable retirement.
  • It can help you reduce or eliminate debt.
  • It can help you save money for emergency situations
  • It can help you and your family have a better lifestyle

Here are 10 examples of financial goals you can apply to your life:

1. Signing up for a retirement plan

A retirement plan is a strategy to accumulate wealth throughout your career. Once you stop working, it can provide you with substantial savings to fund your lifestyle. Before you start saving, it’s important to set a retirement goal. You can do this by determining the amount of money you’re willing to save for every paycheck you earn and then calculating your total savings.

Some employers may also match the amount of money you redirect towards your savings, increasing your saving potential. Signing up for a retirement plan can give you increased financial security and help you prepare for whatever comes after your career.

2. Funding a vacation

As an employee, taking a vacation is an opportunity to alleviate work-related stress and recharge before returning to the office. Vacations also allow you to spend time with your family and friends, helping you create a healthy work-life balance.

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Financing a vacation is an appropriate example of a financial goal that you can set. Research the travel and accommodation costs and consider the amount of money you may need for food, souvenirs and sightseeing activities. It can also be helpful to assess your financial status before leaving so you have resources for other priorities in your life.

3. Resolving student loan debt

Paying for college tuition, campus housing and supplies may require assistance from student loan programs. If you continue your education after completing a bachelor’s degree, you may accumulate additional student loan debt. Consider setting a financial goal to repay your student loans within a certain time period. You can identify the amount of money you can afford to pay toward the loan while still covering your regular expenses. Resolving student loan debt can give you increased financial freedom and help you pursue things you love.

4. Settling credit card debt

Settling credit card debt can give you the freedom to focus on other expenses and build a better lifestyle. Start by determining how much you can repay every month and make sure not to add any extra debt. Once you set a goal, make sure to make your payments every month. You can also establish a schedule for using the card in the future. For example, you may decide to add charges only during the holiday season or in emergency situations.

5. Becoming a homeowner

Another example of a financial goal is purchasing your own home. Consider saving money so that you can relocate to a city that matches your interests. For example, if you want to live in a downtown area, then you might save to own a condo or townhouse. If you want to live in a quiet neighborhood, then you might buy a house in a suburban area. Before you purchase a home, make sure to create a budget that accounts for mortgage payments, repairs and other routine expenses without compromising your daily financial requirements.

6. Launching a business

At some point in your career, you may decide to transition into entrepreneurship. Becoming a business owner can be expensive, as you’re responsible for building and maintaining its operations. You can estimate the amount of money that renting or buying a building may cost. You can also consider how much you can compensate the people who work for the business and the rates of the services you can provide to clients. Other relevant costs can include:

  • Workplace technology
  • Office furniture and supplies
  • Marketing and branding, including business cards, brochures and digital advertisements

7. Paying college tuition

To avoid student loan debt, you may choose to pay for your college education by yourself. Start by finding a job that can help you cover your tuition costs. You can also consider how much it may cost you to be a full-time student versus a part-time student. If you’re attending an expensive school, meet with your advisor and see if you can extend your graduation date to reduce financial stress.

8. Reserving money for emergencies

An emergency fund is a sum of money you can use for unforeseen circumstances, such as natural disasters, medical emergencies or unplanned home repair requirements. It can allow you to pay unexpected bills while still handling your normal expenses. It can also help you avoid accumulating more debt. Consider building and maintaining an emergency fund for your personal and professional interests.

9. Finding a higher-paying job

Another financial goal is to earn a higher salary as your career evolves. You can assess your current earning potential and find ways to boost it, which may include advancing your education or requesting a wage increase from your employer. Earning more money from your job can give you additional funds to spend in areas of your life outside the workplace.

10. Enjoying financial freedom

Financial freedom is the ability to use your financial resources without concerns about overspending. For instance, if you want to travel for a special occasion, having financial freedom allows you to be comfortable with paying for the flight and accommodation. While financial freedom is usually a long-term goal, you can start by establishing short-term objectives, like paying off student loans and credit card debt. This can reduce your expenses, giving you greater saving potential.

Types of Financial Services and Institutions

Financial services is a broad phrase that covers a wide range of services. The financial industry offers a wealth of chances for applicants to discover their ideal match. The alternatives are numerous and diverse, ranging from banking to investing and beyond.

Thus, in order to determine which career path best fits your skills and interests, you need first have an understanding of the scope of the financial services business if you are thinking about pursuing one.

The primary categories of financial services to think about are as follows:

1. Banking

Banking includes handing deposits into checking and savings accounts, as well as lending money to customers. About 10% of the money deposited into banks must stay on hand, as dictated by the Federal Deposit Insurance Corporation’s (FDIC) reserve requirement. The other 90% is available for loans. Some of the interest the bank earns from these loans is given to the customers who have deposited money into the bank.

2. Advisory

This branch of financial services helps both people and organizations with a variety of tasks. Financial advisors can help with due diligence on investments, provide valuation services for businesses, aid in real estate endeavors, and more. In each case, advisors help to guide people in the right direction when making financial decisions.

3. Wealth Management

This type of financial service helps people to save money intelligently, and receive a return on their investment when possible. If you have a 401K program through your employer, that is one type of wealth management.

4. Mutual Funds

Mutual funds institutions offer a type of investment that multiple parties share in. These investments are managed by a professional, not the investors themselves. The buy-in for a mutual fund is not quite as large as some traditional investments in bonds, the stock market, or the like, so they are a popular option for people who are a little hesitant with their finances. The investments are also diversified, which helps to mitigate risk.

5. Insurance

This is one of the most common areas of financial services. Most people have some understanding of insurance; it is a system that you pay into monthly or annually which acts as a safety net and covers costs of some large expenditures which are often unforeseen. There are many kinds of insurance: health, auto, home, renters, and life insurance, just to name a few.

If you want to work in this industry, you need to research and understand not only the different kinds of financial services, but also the different kinds of financial services institutions. Below are just a few kinds of institutions that offer the aforementioned services.

  • Commercial Banks (Banking)
  • Investment Banks (Wealth management)
  • Insurance Companies (Insurance)
  • Brokerage Firms (Advisory)
  • Planning Firms (Wealth management, Advisory)
  • CPA Firms (Wealth management, Advisory)

How Many Types of Financial Advisors are There?

Financial advisors assist individuals, companies, and governments in setting and achieving their financial objectives. For various budgets and financial situations, there exist distinct financial advisors. Making the decision to pursue a career in finance can be made easier if you are aware of the variations in the duties and obligations of financial advisers.

A financial adviser is a specialist in the field of finance who gives advice to people and businesses on how best to arrange, structure, and handle their finances. The knowledge of a financial advisor can help consumers plan ahead and make wiser spending selections.

They help their clients decide on subjects like the amount of money they need to save, the kinds of accounts they should have, and the types of insurance they should have, such as term life, long-term care, and disability. Financial advisers can also give advice on property and taxation issues.

According to regulations set forth by the U.S. Securities and Exchange Commission, any financial expert or company that offers advice to others or reports or analyses of securities in exchange for payment is considered an “investment adviser” and is required to register with the SEC or their state, based on the amount of assets the adviser manages.

However, the majority of titles and advice are not regulated, thus it is the investor’s responsibility to know what to look for. Here are some rules to follow:

1. Titles may mean nothing.

Some of the most common titles advisors use — including the term “financial advisor” itself — aren’t tied to any specific credentials. Don’t assume that someone who uses an official-sounding title has specific training, credentials or registration.

2. Know what kind of advice you need.

Identifying what you want from an advisor can go a long way in finding the right fit for you. For example, if you need help with taxes, you should look for an advisor who specializes in tax work and has a certification to match. If you only want investment management, a low-cost service like a robo-advisor might be the best fit.

3. Find a fee-only fiduciary.

Some financial advisors have a fiduciary duty to their clients, meaning they are obligated to act in their client’s best interest rather than their own. We recommend that you always work with a licensed, registered fiduciary — preferably one who is fee-only, which means the advisor is paid directly by you and not through commissions for selling certain investment or insurance products.

4. Vet your advisor.

No matter what title, designation, certification or license an advisor claims to have, it’s on you to vet the advisor’s credentials and experience. Always research an advisor’s background before you agree to work with them.

Below are the most common kinds of financial advisors and what they do.

1. Investment advisors

While “investment adviser” is the legal term used by the SEC to denote a financial professional who must be registered, it is also used frequently as a job title — and is more commonly spelled “advisor.” An investment advisor is a person or company who is paid for providing investment advice to clients. Investment advisors can also manage client assets directly. You can — and should — verify an advisor’s registration through BrokerCheck by FINRA, the Financial Industry Regulatory Authority.

2. Broker-dealers and brokers

A broker-dealer is an individual or company that buys and sells securities such as stocks, bonds and mutual funds. Broker-dealers can buy and sell on behalf of clients (in which case, they’re acting as a broker), for their own account (as a dealer), or both. In addition to registering with the SEC, broker-dealers are also usually members of FINRA.

The financial products a representative for a broker-dealer can sell depend on their licenses. For example, a broker-dealer who has passed the Series 6 exam is limited to selling mutual funds, variable annuities and related products. A Series 7 license allows the holder to sell additional securities. BrokerCheck can also be used to verify brokers.

3. Certified financial planner

Financial advisors who are CFPs have met the rigorous training and experience requirements of the CFP Board, have passed the certification exam and are held to high ethical standards. CFPs have a fiduciary duty to their clients.

Financial planners can offer services that don’t require regulation, such as guidance on how to pay down debt, plan for retirement or create a budget, but some are also investment advisors. Note that financial advisors can use the title “financial planner” without holding the CFP designation. If you’re specifically looking for a CFP, be sure to check their credentials with the CFP Board.

If you need a financial advisor, NerdWallet recommends working with a CFP whenever possible.

4. Financial consultant

A financial consultant is a general term that can be used by anyone. But some financial consultants hold a designation called a chartered financial consultant, or ChFC. Chartered financial consultants have completed similar education requirements to CFPs. ChFCs have a fiduciary duty and must adhere to The American College’s code of ethics.

5. Financial coach

Financial coaches are often the most beginner-friendly financial professionals. Financial coaches focus on the basics of financial literacy, such as how to save money or reduce spending. Financial coaches can help their clients build wealth that an investment advisor may help them manage in the future.

6. Portfolio, investment and asset managers

Whether the business card says asset manager, investment manager or portfolio manager, these professionals do exactly what it sounds like: They manage client investment portfolios. A portfolio manager or investment manager may deal strictly with a client’s investment portfolio, but they might offer other financial planning services too.

While it’s very likely that investment and portfolio managers give investment advice, and would thus be registered as investment advisors, you should always double-check that they’ve done so through BrokerCheck.

7. Wealth advisors

Wealth managers and wealth advisors typically work with very wealthy clients and offer holistic financial planning services as well as investment guidance. Wealth managers and advisors can often help their clients with every area of their financial life, including services like estate planning, tax help, charitable giving and even health insurance. Most wealth advisors have a minimum investment in the millions.

8. Robo-advisor

A robo-advisor is an inexpensive automated investment management service. Robo-advisors use computer algorithms to create and manage an investment portfolio based on your goals, for as little as 0.25% of your account balance per year. If you just want help managing your investments, a robo-advisor might be the right option for you.

9. Financial therapist

A financial therapist combines behavioral therapy and financial coaching to help improve your money mindset. Financial therapists recognize that budgeting, saving and investing can trigger difficult emotions, and they can help you with trauma and other negative feelings surrounding money.

Ten Tips to Improve Your Financial Management

The existence and expansion of a business depend heavily on effective financial management. To accomplish your business goals, it entails organizing, managing, planning, and keeping an eye on your financial resources.

An organization that practices sound money management will be better able to allocate resources efficiently, meet stakeholder obligations, obtain a competitive edge, and set itself up for long-term financial stability.

Financial management ought to be integrated into your company’s core operations and continuous planning. Even if you may think that managing your finances is overwhelming and hard, the ten best ideas that follow should help you take charge of them.

1. Have a clear business plan

A business plan will establish where you are and where you want to get to over the next few years. It should detail how you will finance your business and its activities, what money you will need and where it will come from.

2. Monitor your financial position

You should regularly monitor the progress of your business. On a daily basis, you should know how much money you have in the bank, how many sales you’re making and your stock levels. You should also review your position against the targets set in your business plan on a monthly basis.

3. Ensure customers pay you on time

Businesses can run into major problems because of late customer payments. To reduce the risk of late or non-payment, you should make your credit terms and conditions obvious from the outset. You should also quickly issue invoices that are clear and accurate. Using a computerized credit management system will help you to keep track of customers’ accounts.

4. Know your day-to-day costs

Even the most profitable of companies can face difficulties if there isn’t enough cash to cover day-to-day costs such as rent and wages. You should be aware of the minimum your business needs to survive and ensure you do not go below this.

5. Keep up-to-date accounting records

If your accounts are not kept up-to-date, you could risk losing money by failing to keep up with late customer payments or not realizing when you have to pay your suppliers. Using a good record-keeping system will help you to track expenses, debts and creditors, apply for additional funding and save time and accountancy costs.

6. Meet tax deadlines

Failing to meet deadlines for filing tax returns and payments can incur fines and interest. These are unnecessary costs that can be avoided with some forward planning. Keeping accurate records saves your business time and money and you can be confident that you’re only paying the tax you owe. Therefore, it’s important that you meet your obligations.

7. Become more efficient and control overheads

Is your business operating at its most efficient? Saving energy and therefore money can happen by implementing changes in behaviour and using existing equipment more efficiently. It’s one of the easiest ways to cut costs. Areas to look at in an average office include heating, lighting, office equipment and air conditioning. You should also consider how much you’re spending on premises as they are often the biggest overhead for a business. You could also think about travelling less and working remotely.

8. Control stock

Efficient stock control ensures you have the right amount of stock available at the right time so that your capital is not tied up unnecessarily. You should put systems in place to keep track of stock levels – taking control of this will allow you to free up cash, while also having the right amount of stock available.

9. Get the right funding

It is essential that you choose the right type of finance for your business – each type of finance is designed to meet different needs. Smaller businesses usually rely more on business overdrafts and personal funding but this might not be the best kind of funding for your company.

10. Tackle problems when they arise

It is always very stressful facing financial problems as a business, but there is help and advice available to help you tackle them before it gets too much to handle so seek professional advice as soon as possible. There are also some initial steps you can take to minimize the impact such as tackling priority debts first and assessing how you can improve your cashflow management.

How Can a Financial Advisor Help Your Business?

60% of business owners who participated in the poll, according to the American College, stated that they had not had a meeting with a personal financial advisor. Very few of them have created a plan to deal with potential changes in the future that could have an impact on the company.

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A financial advisor can assist you in optimizing the return on your initial capital investment in your firm due to their extensive experience and skills. He or she can assist you in determining whether your business concept is viable and in outlining the tactics and deadlines necessary to get you to profitability.

Here are a few ways a financial advisor can help guarantee, boost, and enhance the performance of your company.

1. Business owners need a personal financial advisor. 

Whatever product or service your new business provides, a financial advisor can ask the right questions and find the right answers to make your life easier. They will also be able to make your business more efficient and more profitable by focusing on the actions that will get results. As a small business owner, you will be expected to perform many roles.

At times, you will be acting as the virtual head of many departments, from marketing to product development to IT support. You might also find yourself responsible for packaging, deliveries, direct customer service, and property maintenance. In some circumstances, such as managing and planning your business finances, it’s best to hire professional help. Your finances are not to be taken lightly.

Many things can go wrong in a business from a financial perspective. Mismanaging money, cash flow problems, delayed or over paid vendor accounts cause many new businesses to close. You can consult a financial advisor to make sure that your business is not one of them.

A financial advisor can offer many benefits to help you run your business. They can quickly provide accurate projections that will help you establish and then grow your business. The objective, professional observations of a financial advisor is invaluable at every stage of business growth, but perhaps never more so than in the early months. An advisor can provide you with timely insights regarding such factors as your exposure to risk, where you can economize, and investment opportunities.

By pointing out opportunities, a financial advisor can help you develop and improve your business plan. He or she will have the know-how to help you make the most of circumstances that you don’t yet have the experience to spot. Money is the lifeblood of any business. It flows in and it flows out. It’s crucial to think about your business processes and money in advance to maximize your business success. Who better to discuss money matters and the success of your business with than your financial advisor?

2. Financial advisors lead business owners to cost savings and guide the path to profitability. 

One of the best things about taking the help of a financial advisor is that it allows you to take control of your business’s path. Unless you are already a financial expert, hiring a financial advisor will save you time and money. When you spend time performing functions that are not among your core abilities, you deny your business this expertise. By working with a financial advisor, however, you can receive expert help with your business’s finances. Complex tasks can be taken care of quickly and you can make important financial decisions from a position of strength.

For example, a financial advisor can use his or her experience to establish internal accounting processes for monitoring expenses. Learning through experience can be one of the best ways to learn a lesson. Not every small business owner needs to go through bankruptcy, however, to learn the best ways to handle their finances. A financial advisor can help you avoid costly mistakes, saving you the pain of going through painful and unnecessary rites of passage.

3. Financial advisors prepare businesses for future developments and different stages of business growth. 

When thinking about the future of your business, it’s easy to be affected by emotion. You might be excited, afraid or overwhelmed. A financial advisor, however, can provide you with the cool perspective that is required for dealing with matters of money. A financial advisor can provide you with some much-needed clarity, focus your vision, and help you take your business in the right direction for stability and growth.

To grow, a business requires an objective, a plan to get there, and tactics to make it happen. Your financial advisor comes with a variety of tools that he or she can put to work for your business’s future. There are several things you can do if your business isn’t doing well. A financial advisor may help you and your team to face facts and assess the true likelihood of you achieving your goals on schedule.

Your advisor might help you navigate the problem of a congested marketplace by exploiting or developing a niche market. You need not only good ideas to run a business but the ability to back them up in financial terms. Too few business owners consider future changes to markets, technology, and other circumstances when planning and projecting the future of a business.

For example, the American College discovered that many small business owners fail to make provisions for how to transfer a business to someone else when they retire. This oversight in business succession planning is costly for many businesses and yours needn’t be among them when you benefit from the proper advice.

The opinion of an experienced financial advisor can help a business, and the business owner(s), weather market disruptions, such as new competition or tighter regulatory requirements. If you are wondering whether or not to diversify your product or service, your financial advisor can help you to decide if and when this is a wise idea.

4. Financial advisors help you plan your personal finances in coordination with your business finances. 

Many business owners are motivated to start and build their businesses for the potential future personal financial gains it may afford and plan for business financial viability. Due to the consuming nature of starting a business, it is not uncommon for an owner to solely focus on their business finances and neglect their own personal finances.

A seasoned financial advisor can help you ensure that your personal finances will be in good order along with your business finances. The two need to be coordinated for cash flow, investment and tax purposes. Your financial advisor will also often act as a quarterback between your other professional advisors such as your accountant, business attorney, bookkeeper, insurance broker and estate attorney. These professionals play an important role in your business and personal life and ensuring proper communication and coordination will be critical to your long-term success.

Many business owners avoid hiring a financial advisor in an attempt to reduce costs. This is a very clear false economy. Hiring a financial advisor to help with specific tasks can not only save you time and money, but it can change the course of your business, avoiding risks that are not worthwhile and making the most of otherwise hidden opportunities.

When exploring new territory, it’s good to have an experienced traveler on board. The right financial advisor will not only help you navigate unknown territory, but will also allow you the freedom and confidence to focus on the core aspects of your business.

Selecting your advisors can be one of the most important business decisions you make. Among the things you should think about while assembling a team is the amount of counsel you require, desire, and can afford. Your team’s ideal advisor mix is something only you can determine.

Consider doing the following actions as well:

First, define your needs and the roles of the advisors.

Break down your particular needs into component parts. Do you need a highly specialized sales force? How about a marketing department? Do you need legal advice? How about a financial and tax expert? Determining what you need will make it easier to conduct your search. You need to define each advisor’s role and communicate this information to all parties involved. Specify the conditions when one professional should defer to the judgment of another.

You may want to appoint your quarterback–one advisor who coordinates the overall efforts of all parties to ensure that the “big picture” is kept in mind. Typically, the coordinator will be a financial planner with a strong tax background, or perhaps an accountant with a financial planning credential. This person is likely to be the one you’ll be dealing with most frequently.

Next, find the key players.

Now that you understand the roles of the potential players on your team, it’s time to find the players. Credentials, experience, reputation, expertise, and cost are the most important factors in selecting an advisor. When composing a team, however, there are some additional considerations. A qualified player is one who is ready and able to join the team. Ability can only be determined by asking probing questions.

Once you’ve found your key players, research and verify their credentials.

  • Education: Be sure the candidate has the proper degree
  • Training: Be sure the candidate has an appropriate number of years of recent experience and the appropriate professional designations
  • Licenses: Be sure the candidate has all necessary licenses
  • References: Ask for and follow up on at least three business references
  • Proven track record: Ask for client or customer lists, if appropriate

Make sure to check these traits too.

  • Willingness to work with other financial specialists–To get different specialists to function as one unit, you need team players. Although your attorney is the expert on legal matters, he or she should be willing to discuss the legal ramifications of a decision with other professionals. This remains true even if another advisor prefers a different approach. Be up-front about the team approach; make sure that each advisor is aware of the names, business addresses, and telephone numbers of the other advisors. In fact, one way to build a successful team is to let one advisor refer you to other professionals with whom he or she has dealt in the past.
  • Ability to communicate ideas to you clearly and simply–It is also vital for you to understand your advisors. Make sure that he or she can explain complex topics in simple language and is willing to provide such explanations until you feel comfortable with a particular decision. Set any ground rules before you hire an advisor; make sure that he or she knows just what you expect.
  • Personal accessibility– If your accountant is too busy to take your phone calls or pay attention to the other advisors, he or she is probably not the best choice for your team. In terms of personality, you’ll want to deal with people with whom you feel comfortable.
  • Your own “gut feelings”–Your own instincts also play a part in your decision. Do you like the candidate? Will the candidate be a good fit? These questions can really only be answered by your gut.

Now your team is assembled, what’s your plan?

Now that the team is assembled, the game plan should be fully understood by each player. Make sure your goals and any ground rules are clear. You should have occasional group meetings to review progress toward your financial goals and to discuss major events that have impacted your overall plan.

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