What Is an Investment Advisor?

An investment advisor works with you to determine the best investments for your portfolio. To do this, they must get a complete understanding of your financial situation, investment goals and risk tolerance. Investment advisors will assess your existing portfolio and recommend an investment strategy based on your goals. With your authorization, they’ll purchase investments on your behalf.

Investment advisors will tell you what types of securities to invest in, like stocks or mutual funds. They will also advise you on the risks associated with each type of investment and your expected rate of return. In addition, they will let you know what types of taxable income your investments will generate and how to make your investments as tax efficient as possible.

If you have a specific investment need, an advisor can likely help you with that as well. Say, for example, you want to write options on company stock or create a bond ladder for retirement. Specialized investment advisors can provide focused advice on topics like these without needing to assess your entire investment portfolio.