Role of the Financial Advisor
William H. Wood Senior Technical Analyst Frasca & Associates LLC
This chapter provides a description of the role of the financial advisor in both a competitive and negotiated transaction environment. It provides a comprehensive discussion of the tasks performed by a financial advisor for a municipal governmental entity and provides information designed to assist a typical governmental debt issuer in selecting the best possible financial advisor for its needs.
OVERVIEW OF FINANCIAL ADVISORS AND THEIR ROLES
Many issuers of municipal debt employ one or more financial advisors to assist them with their bond sales, the reinvestment of bond proceeds, and the structuring and pricing of related financial products such as interest rate swaps. A financial advisor may be a local or national firm and may have anywhere from one to several hundred employees. In all cases, however, the financial advisor is there to assist the governmental debt issuer in the successful structuring and/or sale of a bond issue or other financial product and to offer general financial advice and assistance, as requested, on budgeting, financial planning, and Treasury-related issues. Financial advisors principally help guide issuers through the complex process of debt issuance. In some cases, the financial advisor may be an investment bank that also underwrites municipal bond deals; more often the financial advisor is an independent firm that does not actually engage ...