How to choose the best investment advisor?
An investment is the use of money in buying stocks, mutual funds, businesses, property etc. for future gains and profits. Analyzing options for investment for better profits is a sizeable task and required thorough knowledge and understanding and can be a risk. Hence, investment advisors who have knowledge, education and experience of how the market works, understanding charts and finding the most beneficial investments to maximize profits are hired. They charge a flat fee or charge a percentage of assets that are being managed. An Investment advisor can be a single person or a group of individuals and can directly handle the assets or have blogs, newspaper columns and a public domain for advice of asset management.
Choosing the best advisor:
Choosing the best investment advisor to maximize your returns and reduce risk is essentials and here are a few guidelines to keep in mind before deciding:
1.Find out the pay structure, i.e. whether they charge on hourly basis, a flat fee or commission on the assets that are being managed. Usually commission based advisors look out for the clients more as their commission is on the basis of the performance of the assets.
2.Avoid bragging advisors which claim to have guaranteed returns and market beating performances, as most of them is puffery and untrue. No one can fully guarantee a return, as the market performance can only be predicted. No investment is completely risk free and plans, charts and analysis could go wrong.
3.Ask for recommendations from friends and family, as they can help you find a great advisor who is managing their assets as well. It’s always better to know hands on reviews rather than reading them in the paper or online.
4.The most important thing is to check for certifications, credentials and licenses of the advisor and make sure they are valid. You don’t want your money and investments to be managed by an under qualified individual.
What not to do when investing?
Investment is always done with the money left over after savings and expenses. Always make sure you have a reserve of emergency money and don’t invest all of it. A good investment advisor will look at your profile, taxes, sources of income, expenses, risk level etc, before deciding on investments. It is very important to analyze your money as well as the company, shares, business you are looking to invest into.
Robo-advisors and their advantages:
With the advances in technology and its boom, the investment advising companies are also venturing into this arena. Robo-advisors use software and algorithms to provide investment advice and thus having minimal human intervention. The software deployed by the advising company sorts, allocates, and manages the assets of the clients. Better analysis and machine learning techniques are proving to be very advantages and minimizes human error. The robo-advisors manages the clients profiles, available investments, risk profiles and the return target and finds the optimum returns for them. A higher level of trust is also achieved using these, as the investment software is same for all clients, and no client can be ripped off for personal gains.