Investment Adviser: What do you need to know before hiring?

Investment advice 1

Learn about the differentials of an investment advisor and how it can help with profitability or diversify the investment portfolio

For both new and experienced investors, one thing does not change: financial education practices are essential. Without setting goals and without knowing for sure how and where you are investing, it becomes even more difficult to take care of your assets.

Financial education is the first step towards achieving good profitability. And for that the figure of the investment adviser helps investors in decision making.

If the market seems cloudy or the day-to-day prevents a close monitoring of the variations that occur, the investment advisor is the appropriate professional to help in these moments.

To know the tips about this service and the differences, keep following the article that John Labunski will explain everything to you.

What is an investment advisor?

The investment advisor is a qualified professional who indicates the best applications according to the client’s expectations. The recommendations made are always based on the profile of those who hire the service.

The differential of the professional in the area is the accumulated knowledge, as well as the experience in the financial sector. Qualities that are differentials when the doubt about where to invest arises.

The work done by the consultant normally follows three phases:

  • Profiling the contractor: The investment advisor will profile the client, noting risk tolerance, desired objectives and resource capacity. If you already have investments made, the consultant will analyze them to see if they are adequate and if they are not redundant with each other;
  • Elaborating strategy: With the profile outlined and knowledge about the possible existing investments, the consultant will indicate new investments that meet the short, medium and long term objectives of the person who hired him;
  • Monitoring: With the strategy in progress, the consultant monitors and informs his client about the results, being able to indicate revisions and new directions;

Why hire this service?

 Whether helping with new products, seeking profitability, or even asking questions, the investment advisor service should be hired.

Many investors also seek help when it comes to diversifying their investment portfolio . If you want more tips on how to put together a strategy for your portfolio.

 Those who seek the service of consultants are mainly looking for:

  • better profitability;
  • save resources without loss;
  • security to make decisions;
  • indications based on the investor’s profile;
  • Diversification of the investment portfolio.
  • Other situations may require this service, such as:
  • union or separation of goods;
  • retirement planning;
  • receipt of large amounts (inheritances/bonuses);
  • Patrimonial succession.

What is the cost of this type of service?

The charge for the service can be done in several ways, but in all of them it is essential that everything that has been agreed is in the contract, making it clear to those who hire the service the costs involved.

In general, there are two ways of charging that can be done by means of an Administration Fee, this being a fixed amount, or that can be done by a Performance Fee, with a variable amount based on a percentage of the investment or on the income. Obtained.

How to choose a qualified consultant?

 A qualified investment adviser is registered with the Securities and Exchange Commission. The registration demonstrates that the professional and the company they represent have the required documentation for a quality service.

It is also possible that the consultant has certifications that attest to the quality of their services. Among the certifications, one of the most desired among consultants is the CFP (Certified financial planner) global credential.

 Difference between a consultant and an advisor?

In order not to have surprises when hiring the service, it is necessary to separate what are investment advisors from the so-called advisors. The service offered by the advisors, who are autonomous agents, are linked to brokers and administrators.

In this way, the main function of the advisors is to offer the products of the company they represent, as they are paid by the commission of the services they offer.

Thus, the general understanding is that the service offered by advisors can be biased by the conflict of interest generated, and it is not clear whether the service offered is the best for the client or if it is the one that pays the highest commission for the independent agent. .

However, to have no doubts about the contracted service, check all the products, compare, ask and confirm everything in the contract. And this also applies to the service of consultants. Depending on the objectives, professionals can work together.

 Consultant x Bank

Like agents, bank managers sell the products of the institution in which they work. As the banks’ interest is to increase profits, they set product sales targets for their managers.

They offer these products to customers who, due to their proximity to the manager, often believe that this information is enough to choose where to invest. The conflict of interests is evident, because not necessarily what will give the bank more profit will give the investor.

 It is clear that the service of an investment advisor in relation to the bank, in addition to being more interesting for the search for personalized investments, values ​​​​the clarity and independence of the investment made. Always looking for the highest return on investment for the customer.

 How can I hire an investment advisor?

 It is possible to find a consultant registered by the Securities and Exchange Commission (CVM) on the autarchy ‘s website . If you contact a company that offers consulting services, confirm that they have the registration.

With this information from John Labunski, you now know the importance of financial education and the role of an investment advisor. Don’t miss out on investing!

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