Financial Services

There are financial products and there are financial services. An example of a financial product is a mutual fund. An example of a financial service is the advice you received before you selected the mutual fund. Another financial services' example is the performance reports you receive each quarter that describe your results, exposure to risk, and other important information. Therefore, financial services can be viewed as services that help you make financial decisions, monitor your investments, and manage investment risk.

When advisors recommend products it is usually a one-time event. They recommend products and you buy them. On the other hand, most financial services are ongoing. For example, you receive your performance reports every quarter. You meet with your financial advisor several times per year to discuss the securities markets and your financial strategy. Your advisor recommends changes to your asset allocation based on ever-changing market conditions.

When investors select financial advisors they are usually seeking advice and financial services. You need both if you do not have the expertise to conduct investment-related work on your own and make unassisted investment decisions.