A Guide On The Work Of Investment Advisors

19 May 2021
 Categories: , Blog


Are you planning or already investing in financial securities like stocks and mutual funds? If your answer is yes, then you probably need the services of an investment advisor. These financial advisors have specialized knowledge and skills in investment management. Thus, they can offer guidelines to achieve short- and long-term investment goals. Engage a financial advisor to increase the likelihood of successful outcomes. Below are key insights about investment advisors.

Who Is an Investment Advisor? 

Investment advisors are individuals and firms that offer specialized advice to clients wishing to buy and sell financial securities at a fee. Typically, the advisor may work directly with the client and guide investment decisions. Alternatively, the investment advisor may analyze the stock and capital markets and issue an advisory report through publications. There is a range of investment advisors, including money managers, financial advisors, asset managers, and investment consultants. These experts do offer recommendations on securities. 

Who Needs Investment Advisors? 

Investment advisors provide their services to individuals and groups. Thus, you can engage a financial advisor as an individual, for a trust, for a family, or as an investment group. More so, investment consultants support institutions like corporations, pension plans, endowment foundations, and mutual and hedge funds to manage their securities portfolio. 

Services Offered by Investment Advisors 

An investment advisor offers advice and management services to grow or increase the value of investment portfolios. In achieving this goal, the consultants use combined strategies. In particular, some advisors specialize in managing equities, bonds, or cash. Others offer comprehensive services that manage combined portfolios. 

Ordinarily, the investment advisor receives the investor's profile indicating personal objectives, time horizon, and risk appetite. The advisor then creates a proposal for investment portfolios with an investment policy statement to act as a guideline. Finally, the investment advisor organizes and manages the portfolio using established procedures and provides progress reports. 

Given the fluidity of the money and capital markets, investment advisors may have discretionary authority. In this case, the client provides formal authority during onboarding, allowing the advisor to act on their behalf without further permission to execute a transaction. This freedom enables the advisors the flexibility to make strategic and rapid portfolio management decisions.

Investment advisors have an ethical obligation to act in the best interest of their clients during the service provision. This requirement helps overcome the conflict of interest. Thus, clients have an assurance that their transaction receives priority over the consultant's investment interests. More so, the investment advisors ensure that their recommendations are tailored to the client's needs.

If you wish for help with investments, hire an investment advisor. These consultants have the expertise and strategies to manage financial securities and achieve investment goals.