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What does a financial advisor do?

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What does a financial advisor do?

If you need advice to manage your finances, then you can take the help of a financial advisor, who is an expert on matters related to finance.Your advisor can help you plan and manage finances. You may have come across the terms ‘financial planner’ and ‘financial advisor’ that are used interchangeably. The key difference is that financial advisors advise clients on various aspects of their finances including investments, estate planning, debt management, etc. while a financial planner is usually more concerned about creating a plan to help you achieve your financial goals.

If you want professional help in managing your finances, so that you systematically plan the way you spend, save, and invest money; then you consult a financial advisor. While selecting an advisor, keep the following points in mind

  • Experience: Your advisor should be well experienced and have a proven track record of helping other clients manage their finances.
  • Qualifications: Look for an advisor that holds a degree in finance or is certified as a financial advisor.
  • Services offered: Look for an advisor that offers a broad range of services that are not restricted to only investments.Investment advice can be one included in the services offered. An investment advisor provides advice on investing money, whereas you are wanting a financial advisor to help managing your finances.

What does a Financial advisor do?

A financial advisor provides a wide range of services.

  • One of the first things they will look at is your overall finances, so that they can advise you on how to save money and reduce unnecessary expenses.
  • Assist in planning your financial goals.An advisor will try to understand your needs, from the short, medium, and long-term perspectives. Based on this, they will advise you on the financial goals that you can set. This includes short-term goals like planning for purchase of a car or house, planning for children’s education, as well as long-term goals like retirement planning.
  • The advisor will try to understand your tolerance for risk. This will help in offering investment solutions.You may be administered a questionnaire and based on your answers, your risk tolerance will be decided. Your risk tolerance may be classified as high, medium, or low.
  • Investment advice. This involves helping you decide how to invest the money that you have saved. You will be provided with information on the investment options that are available for you that meet your risk tolerance.
    • Stock market investments in stocks or mutual funds.
    • Debt investments (bonds, Govt. securities).
    • Retirement funds (IRA, 401k, Pension plan)
    • Physical assets like real estate, gold, and precious metals
  • Insurance is another area where you can obtain advice. The advisor will understand your needs and based on the same suggest the right insurance plan and the amount to be insured.
  • Once the financial goals are decided and the risk tolerance is determined, the next activity is to create a financial plan. You will be assisted in preparing a comprehensive plan that will include the following:
    • A plan to save money every month
    • Debt planning to clear all existing debts
    • Plan for taxes
    • Plan for saving money for insurance
    • An investment plan with details on different assets to invest in. This is decided based on risk tolerance and goals.
    • Method of investing – one time investment or systematic investment
  • Once the plan is created, you can even ask for help in actually going ahead with the investments. This includes help in opening an investment account and carrying out investment-related transactions.
  • Your financial advisor will review the financial plan with you periodically to find out if the plan created is achieving the goals set up and if your needs have changed. This includes reviewing the assets invested and their performance. Where required, corrections are suggested in your plan.

A financial advisor can provide a range of services to suit all your needs. In return for providing this advice, he may charge a fixed fee or charge an annual fee to provide advisory services every year.

Online and Robo advisors

The process of getting financial advice has traditionally involved a meeting between the advisor and the client. Thanks to the growth of online service providers, the entire investment advisory process can be done online. You can now interact online with an advisor. This can help to save time and can reduce your expenses too. A popular advisory option nowadays is the use of Robo-advisors. A Robo-advisor is an Artificial Intelligence based software that can help you manage your finances. The advice is generated based on the inputs you provide. Since there is no human intervention, you will be charged a lesser fee. A robo-advisor will not have any bias in favor or against a financial product and will advise solutions strictly based on data.

Financial advice is very helpful if you want to manage your finances in a smooth and effective way. If you are looking to create wealth and save for the future, a financial advisor can help you do this.

Business

UK finance sector revives, cuts staff, reviews office space – survey

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UK finance sector revives, cuts staff, reviews office space - survey 1

By Huw Jones

LONDON (Reuters) – Business volumes in UK financial services grew for the first time in two years during the final quarter of 2020 when firms shed staff and remote working in the pandemic spurred reviews of office space, a survey showed on Wednesday.

The latest Financial Services Survey published by employers’ body CBI and compiled by consultants PwC, was completed before a third lockdown was introduced in England from January.

“Unfortunately, the health and economic picture has sadly deteriorated since with restrictions tightening again,” said Rain Newton-Smith, chief economist at the CBI.

A trade deal with the European Union came into effect on Jan. 1 but does not cover financial services, which is being handled separately by Brussels under its “equivalence” system.

The EU was the City of London’s biggest customer.

“Meanwhile, work must continue on using existing pathways with the UK Trade and Cooperation Agreement to reach better outcomes for the financial services, particularly on equivalence,” Newton-Smith said.

Firms expect business volumes to grow at a slightly quicker rate in the first three months of 2021, the survey said.

They also expect to cut headcount further this year, with remote working prompting them to consider redefining, reconfiguring or cutting existing office space.

Many financial firms in London have opened hubs in the EU as they don’t expect the bloc to grant much direct access under equivalence.

Consultants EY has said that over 7,500 financial jobs have already left Britain for the EU.

“More work is yet to be done on the movement of people into roles in the EU and the migration of client contacts,” the survey said.

(Reporting by Huw Jones; editing by David Evans)

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Finance

KBC Bank chooses Finastra for LIBOR transition

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KBC Bank chooses Finastra for LIBOR transition 2

Fusion Loan IQ Alternative Reference Rate module and Fusion LIBOR Transition Calculator will help the bank move away from LIBOR

KBC Bank, a Belgium-based bank with operations across Europe, US and Asia Pacific, has chosen Finastra to help manage its transition through the upcoming interbank references rates changes. It has selected Fusion Loan IQ Alternate Reference Rates (ARR) module to manage new rates and to expand its lending business. The bank has also opted for the Fusion LIBOR Transition Calculator to help calculate rates ahead of the transition period.

Melinda Christens, Business Program Manager LIBOR Transition at KBC Bank said, “We’ve been using Fusion Loan IQ for a number of years, and have been impressed with the way the solution is able to continuously adapt over time, adding new functionalities in line with changing regulations. The transition away from LIBOR is daunting for most banks, but with the help of Finastra’s solutions we’re able to continue to calculate rates and embark on a smooth transition.”

Fusion Loan IQ is Finastra’s solution for commercial lending, powering 71% of all syndicated loans around the world. It alleviates the high costs of system and process redundancy within commercial lending operations, as well as increasing transparency, improving risk management and simplifying entry into new markets or business lines. The latest version of the solution, enhanced to support ARR, provides banks with core capabilities to issue new loans using the replacement rates, allowing them to begin to transition their existing LIBOR portfolio safely.

Fusion LIBOR Transition Calculator will help KBC Bank manage the transition before the ARR module is rolled out. It enables market participants to calculate their own ARR or Risk-Free Rates (RFR) and interest accruals. The calculator service independently accesses the ARR/RFR from external official sources, such as the Federal Reserve Bank of New York, for the secured overnight financing rate (SOFR). It then calculates compounded in arrears rates and daily non-cumulative compounded rates, along with corresponding interest accrual amounts for a set of inputs. Depending upon the rate method chosen, the calculator has the flexibility to calculate the daily compounding rates for the whole period or only for the end date. It follows Finastra’s Fusion Loan IQ ARR calculations, which gives market participants consistent and accurate results.

Built on FusionFabric.cloud, Finastra’s open innovation platform, the calculator’s open API facilitates the integration with systems that don’t yet have a solution in place for calculating ARR/RFR rates. This significantly reduces operational risk.

“The shift away from LIBOR is the biggest change the market has seen in lending over the last three decades. It is also a once-in-a-lifetime opportunity to innovate and serve customers better, and so the need for a flexible service that can expand over time is a must,” said Robert Downs, Global Head of Corporate and Syndicated Lending at Finastra. “Our Fusion Loan IQ ARR module and the transition calculator are designed to keep pace as ARR methodologies and conventions evolve, protecting our customers from risks associated with complex system changes and ultimately future-proofing their businesses.”

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How contactless payments helped a pizzeria survive 

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How contactless payments helped a pizzeria survive  3

By Kaushalya Somasundaram, Head of Payments Partnerships & Industry Relations at Square, UK

The Covid-19 pandemic has caused continued uncertainty for the hospitality industry. Many have been forced to pause operations or adjust the operations so they can keep trading.

Businesses are continuing to address social distancing rules by rapidly accelerating their digital capabilities. From bakeries to pubs, we have witnessed businesses shift to selling online, offering click and collect services to making their goods available for delivery.

But one of the most integral ways technology is aiding these businesses is on the payment front.

Contactless payments and cashless businesses have been around for years, gaining popularity for the ease and convenience it offers businesses and customers alike. However a new significance has been  placed on all technologies that reduce physical contact and time needed to complete a transaction.

It’s no surprise the number of cashless businesses in the food and drink sector is skyrocketing, from 8% in January 2020 pre-lockdown, to 33% in July 2020.

Contactless payment technology has played a vital role in the survival of many businesses, including a pop-up pizza business based in Cambourne, Cambridgeshire.

From hobby to hub

When Sam Corban first tried his hand at pizza-making, it was out of interest. But after moving to Cambourne, he decided to turn what had quickly become a hobby into a business.

Sam approached local council offices to seek support in getting his idea for an artisan pizza pop-up business off the ground. And in February 2017, 400° Pizzeria fired up its oven for the first time, trading every Friday night at the Cambourne Cricket Pavilion.

Prior to the pandemic, Sam’s trademark 24-hour slow proof dough – which had taken him almost nine months to perfect – had garnered him a fond reputation around the village. It wasn’t long before his popularity meant he could hire his first staff member.

However, fostering a close relationship with his local community has been equally essential to Sam’s success. He has several pizzas named after customers – from the classic Nduja to The Debbie – and often asks his regulars for feedback regarding new recipes.

The success of his pop-up has influenced other local artisan street food providers, who’ve since joined him at the Pavilion on Fridays which has helped create a local hub for Cambourne locals.

Once the pandemic hit and a new normal descended on the world, Sam knew he had to react quickly and intelligently if he was going to continue doing business and be a positive force in his community.

And that all started with how he took payments.

The unexpected virtues of contactless

Despite accepting cash, Sam has always encouraged his customers to pay with card whenever possible, even pre-pandemic. It’s simply a quicker way to complete a transaction, especially now most bank cards have contactless chips.

After trying out a few contactless terminals, Sam decided to use the Square Terminal, an all-in-one card machine for everything from managing items and taking payments to printing receipts and getting paid. Once the pandemic started it was a no brainer to become completely cashless. “As all my payments are processed seamlessly through the Square Terminal, I’m cash free,” explains Sam. “This means I can process orders faster and don’t have to deal with hygiene issues posed by taking cash.” 

And, the peace of mind this offers customers can’t be overstated. It means they can get a slice of community and normalcy (along with pizza) in a time where they’re cooped up at home and need to keep contact to a minimum.

As a result, Sam was able to keep operating safely and successfully throughout 2020.

A future-proofed pizzeria

Sam’s success is closely linked to how he connects and engages with his local community. As well as his weekly pizza pop up, he’s also started stocking his van with dry goods such as flour and pasta to deliver goods to those who can’t leave the house. He has even started offering home pizza making kits – giving local families a fun way to jump on the lockdown home baking trend.

These acts, plus the digital transformation he’s undergone over the course of the year, will resonate positively for the pizzeria long after this pandemic is past. Not only has he cemented his place in his local community, but the technology he’s adopted has helped him flex his operations.

As Sam shows us all, with a sprinkle of technology and a healthy serving of community spirit, every crisis can also be an opportunity to grow and evolve.

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