As a layman with no knowledge or
understanding about investments like mutual funds, stocks and bonds you might
find it extremely difficult to manage your money. It becomes even harder when
you don’t know how to interpret financial parameters such as interest rates,
dividend yield, stock indices etc. For this reason you need a professional to
help you out.
An investment advisor is an
expert in financial matters and managing money. They help you select investments
that will maximize returns and leave you smiling all the way to the bank. They
advise you to open an account and with your authorization they purchase and
trade in different investments.
What should you expect from your investment advisor?
Investment management. Simple. By
this we mean that your advisor will
·
Help you write options or cover calls on your
company stock.
·
Help you manage any inherited large
portfolio of stock or bonds or help you sell them out.
·
Help you create a bond ladder for retirement
income.
How do investment advisors get paid?
Investment advisors charge a
management fee. It is usually a percentage of the assets or portfolio they
manage on your behalf. However, how investment advisors charge for their
services may vary from one to another. Other investment advisors charge a
combination of fees and commissions, others charge a flat fee for the existing
portfolio, while others prefer an annual retainer fee.
It is advisable to sit down with
your advisor and agree on payment terms before entering into any agreements.
Ask for a disclosure document and seek to find out the implication of each mode
of charging for services on your investment returns. An investment advisor Gainesville
will give you a plain English explanation that you can understand and disclose
any potential conflicts of interest.
How can you recruit a good Investment Advisor?
From the website of an Investment firm
Get onto any search engine and
find the best investment firms that will pop up. You can then look for a good
advisor form the individual websites where most often there are wealth
management and investment experts offering advice.
From Investment Magazines
If you are interested in money
and financial matters, investment magazines are a must-have. Top financial
advisors are often published and you can sift through the list, interrogate the
advisors individually and pick the one who impresses you.
Referrals from your contacts
It is a good idea to approach
your friends and families who have experience working with different advisors.
It gives you the opportunity to sample their performance even before you hire
them. If your referrals have loads of complaints about an advisor or if their
experiences were unpleasant avoid such advisors like the plague.
Seek the Advice of other Advisors or Consultants
If you have other trusted
advisors say accountants, tax planners, insurance agents or attorneys, they may
be in a position to refer you to a trusted associate for business. It is still
important for you to interrogate such referrals to ensure their recommendation
is unbiased and has no conflict of interest.
Should the above tips not work,
it is advisable to pay a consultant to help you find and hire a good advisor.
They will help you sift through the chaff and ensure you are a satisfied
investor.
