Financial Advice is advice given in relation to financial matters such as investing, insurance, borrowing, saving and retirement planning. Professionally, the advice is given only after the financial situation of the client is unveiled through a thorough fact-finding and analysis exercise. Many financial advisers also double-up as financial planners because their function is crossed in many areas. This principle of understanding the client's situation before advice are given is known as the 'know your client' rule. Once the client's actual financial situation is known, a set of prescriptions are provided by the financial adviser to solve those client's problems that are uncovered.
Financial advisers may or may not hold distribution contracts with financial institutions as part of their business. Those who do not are often referred to as Independent Financial Advisers (IFA) as they are not influenced by the commissions they get for recommending financial products, and hence, are considered less bias when advising their clients.
In some countries like Singapore and Malaysia, financial advisers are not individuals but companies who are licensed by the respective Authorities, such as the Monetary Authority of Singapore (MAS) or Bank Negara Malaysia (BNM). Those individuals who represent these financial advisers (companies) are called financial adviser representatives. Those who give financial advice related to securities in Malaysia need a separate licence from the Securities Commission (SC). Other institutions including insurance companies, investment companies, banks and lawyers may offer financial advice in addition to other services.
Many financial advisers see their profession as complementary to other professions who give legal advice, tax advice or medical advice. Financial advice in this context is a professional service with its own criteria and professional boundaries. The giving of financial advice is a regulated activity in many jurisdictions.