Introduction
Having a right Investment Adviser to manage your investments and portfolio early on in your investment journey is probably a smart thing to do.
Especially for working class professionals, who devote much of their time in day to day work activities and seldom have any time to monitor the stock markets and track investment.
When you are ready to pay an Annual Fee for the Investment Advisory Service, one must thoroughly ensure that they are taking all precautionary step before concluding on the right adviser.
Also Read: Market Capitalization: The Right Way To Track Company’s Growth
Pros of having a dedicated Investment Adviser
Having an adviser to help you to better understand your financials is always a good option to start with. It shows your seriousness with money. Your relationship with your funds is justified.
A dedicated Investment Adviser
- Will save you time
- Present you with diversified opportunities to invest
- Set an accountability for your investments
- Keep you posted about your investments behaviour
- Prepare detailed analysis for your better understanding
- Prepare a portfolio based on your risk appetite and future needs
- Device of corpus for meeting your short term and long term goals
For working professional, it gets very difficult to actually even spare a minute or two to keep a track of your investments, which could hamper your investment plans in the long run.
When do you need a Investment Adviser
It’s not always necessary that you need an investment adviser. For me, I usually like to do it on my own. The primary reason is by dedicated interest in the subject. I know what I’m doing, how I’m doing and must importantly, why I’m doing.
I sincerely believe that, individuals with non financial background need to have a dedicated Investment Adviser.
An Investment Adviser is a professional, just like a doctor or a lawyer, who will provide you with expert services in this area of domain.
Selecting the right Investment Adviser
The following are my outlook when it comes to selecting the right Investment Adviser:
- Experience over theoretical knowledge
- Skin in the game
- A need based Investment Adviser
- A regulated Investment Adviser
Experience vs Theory
It is very much important to look for an investment adviser experience over someone with only theoretical knowledge and educational credentials.
An experience investment adviser who has witnessed multiple stock market cycles during course of his investments will be in a better position to invest your money right way, than an investment adviser with not much of an hands on experience and more of theoretical knowledge.
Skin in the game
A good investment adviser should actually be better and handling his own finances before handling the finances of an investor.
A good investment adviser will not only recommend his clients with investment opportunities, but also participate in those investments to take maximum benefit out of it.
Ensure that your adviser has a sizeable amount of skin in the game with his investments as he recommends his investors with a placement opportunities.
A need based Investment Adviser
Understanding your personal needs before is crucial before selecting you are investment adviser.
By stating “understand your personality” I mean your risk taking ability and your investment goals. Whether your goals are short term or long term, what is the type of return you are looking, how are you planning on diversifying your portfolio, what is the volume of investment etc.
An individual with a higher risk taking ability can opt for an Equity Investment Adviser. On the other hand, an individual with a low risk taking ability can simply choose a Mutual Fund Investment Adviser or any other investment adviser who holds an expertise in Debt Instruments.
Also Read: What Are The 3 Basic Structure Of Mutual Funds
A regulated Investment Adviser
Not every individual can act as an Investment Adviser for his clients.
In order to be an investment adviser there are set criteria prescribed by SEBI and by meeting those criteria an individual can call himself as an Investment Adviser.
Investors need to ensure that the Investment adviser they are planning to be associated with have the necessary licenses and permissions as per the legal and regulatory authority to perform his duties.
Conclusion
Selecting right investment adviser early in your investment journey is a critical step that can enable you to generate stable wealth over longer course of time.
Having a right investment adviser will not only save you time, but will also generate a greater rate of return, without you being much involved in the daily course of stock market activities.
It is always easy to approach your investment adviser and seek clarifications on any ambiguity that is occurring in your portfolio, rather than taking an impromptu decision or simply following the herd mentality.
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