An investment consultant (or investment adviser) is an individual or firm that advises clients on investment matters on a professional basis. They tend to fall into two distinct categories: Investment advisors offering direct financial advice to individuals or businesses, or Investment advisors offering asset management for (typically) corporate clients, hedge funds and/or mutual funds. Depending on the nature of the relationship, investment advisors charge fees calculated as a percentage (e.g., 1%) of assets under management (see: fee-only financial advisor), on an annual basis, an hourly or on a flat fee basis.



In general, under U.S. law, investment advisors owe their clients an ongoing fiduciary duty to provide full and complete disclosure of all fees, conflicts of interest, and if so authorized, to exercise discretion in selecting investments with only their clients' best interests in mind. In many cases, a registered investment advisor (RIA) is a corporation or partnership while the person actually providing the advice is an investment advisor representative (IAR) of the advisor organization.

Investment advisor representatives and individuals registered as investment advisors are sometimes certified as a Certified Financial Planner (CFP) practitioner by the Certified Financial Planner Board of Standards, Inc. or a Chartered Financial Analyst (CFA) holding a charter from the CFA Institute after they have passed the appropriate examinations, have agreed to abide by a code of ethics, and have maintained the required continuing education credits.

Financial Advice is advice given in relation to financial matters such as investing, insurance, borrowing, saving and retirement is 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 is given is known as 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. The CFP and CFA credentials are not, however, required for registration as a registered investment advisor. The registration process to become an investment advisor is becoming increasingly complex, with examination requirements, books and record retention and increased state regulation of smaller investment advisors.

See, Registration of Investment Advisors. In the United Kingdom investment advice is given either by a financial advisor or a stock broker. Financial advisors need to pass an exam to practice (Financial Planning Certificate) and are authorised by the Financial Services Authority, a UK government qango that needs to be satisfied the adviser is fit and proper before he/she can practice. Financial advisors are tied, multi-tied, or independent. As the classifications suggest a tied advisor can only recommend financial products marketed by the company he or she represents. Typically that company employs him or her but in some cases he or she can work for that organization under a type of self employed contract that usually precludes other paid work of any kind. A multi-tied agent performs a similar role except that he or she represents a number of different companies. This is sometimes referred to as the panel system.

An Independent Financial Adviser must offer whole of market advice and, in addition, must offer prospective clients the choice of paying a fee for advice, rather than being remunerated via commission from the financial product provider. Tied and multi-tied advisors are nearly always rewarded via commission although in some cases (and if the advisor is employed rather than self employed) commission may be expressed in notional terms to justify a salary.