Investment Advisory Services – Features, Types, Cost, Pros, And Cons

If you run a business or are the owner of a company, you might require professional services that will offer you guidance on whether to invest or not. These professionals work under a firm that provides Investment Advisory Services that guide its clients on how to develop an investment plan for growing wealth strategically. Here is how investment advisory firms work and what to expect if you work with them.

Investment Advisory Services Delineated

A firm or individual known as an investment advisor focuses on counseling clients on the purchase and sale of securities in exchange for money. There are two options for this. An investment advisory will first provide their services by working with the client one-on-one advice regarding investments. Alternatives include issuing advisory reports as well as other publications on particular securities by individuals or firms.

An investment advisor’s tasks and duties have been explained accurately as per the Investment Advisors Act, of 1940. The same act states three guidelines to list who is an investment advisor and who is not, and the three guidelines are as follows: – 

• What sort of advice are they providing?
• In what way will you be paying an individual or a firm for the kind of advisory service they are providing?
• How do they earn most of their income or from where do they generate most of their income (i.e. offering investment advice or another person)

An individual or firm that engages in providing advice or suggestions comes is classified as an advisor. These persons were classified as asset managers, money managers, investment consultants, wealth managers, hedge fund normal partners or an individual who earns a substantial amount for providing valuable advice on securities investment. Usually, these people help you select the relevant, correct, and suitable investments for your requirements, handle your portfolio, and also offer other suggestions linked to investments. It is paramount to choose the right investment advisors as there are various forms of investment advisors.

The U.S. Securities and Exchange Commission (SEC) typically requires investment advisors to register themselves. In general, SEC registration is restricted to firms and individuals who manage at least 25 million USD in assets. Advisors who are responsible for assets valuing 100 million USD or above must register themselves. Advisors must be registered with the state-owned regulatory agencies if they possess assets less than USD 25 million. However, very few advisors get themselves registered or hold a series 65 license, hence, it is imperative to conduct proper research to ensure that they are eligible to help you.

Also, Read

• Financial Modeling Books
• Where To Learn Financial Modeling
• Financial Model Job Description
• Financial Modeling Techniques
• Financial Modeling Skills
• Is Financial Modeling A Good Career Option 
• Investment Banking Financial Modeling
• Financial Modeling Interview Questions

Types of Advanced Investment Advisory Services 

Advanced Investment Advisory Services come in a wide variety of forms, but they may generally be categorized into two types – fee-oriented and commission-focused. While a fee-oriented investment advisor solely receives fees, whereas a commission-focused investment advisor gets rewarded with the help of a sales charge.

Various Forms of Advanced Investment Advisory Service Examples 

Here are a few examples of the different sorts of Investment Advisory Services – retirement plan guidance, education funding analysis as well as distribution planning, portfolio management, financial planning, insurance as well as endowment management.

Using a Financial Plan Provided by an Investment Advisor You Can Do the Following: 

• Remain relaxed and confident regarding your financial future
• Save money after taxes
• Make well-informed decisions regarding investments
• Act as a shield for your family using life insurance
• Handle credit as well as debt in an improved way
• Reach retirement savings objectives 

Cost of Hiring Advanced Investment Advisory Service Professional

An investment advice fee is normally calculated in the form of a percentage based on your assets. For a smaller firm, this amount is frequently 1%, but for investors boasting enormous portfolios, it can reach 3%. For some particular services, a few financial advisors could charge a direct rate or a fee based per hour. Although when you hire an investment advisor they may charge you money in the form of fees, there may be other ways it can save you money. For instance, fee-based financial planners could assist you in avoiding pointless commissions as well as insurance expenses that could decrease your savings. Consequently, you must perform a cost-advantage analysis of the fees paid compared to the fees paid to any commissions and insurance expenses you could have spent if you hadn’t started working with an investment advisor.

Choosing an Advanced Investment Advisory Services 

While selecting an advanced investment advisory service, you must confirm that their ideology aligns with yours. For example, suppose a person A’s financial objectives are to stay alive within his means and save for his children’s college education then he should choose to work with an investment advisor who is ready to work with him to attain those objectives.

You Can Learn More if a Financial Advisor’s Ideology Aligns with Yours if You Ask the Following Questions:

• What kind of clients does the particular financial advisor offers his/her services to?
• If the financial advisor has any preference for working with a particular form of investment?
• What are the investment ideologies of the specific advisor?
• Whether the advisor owes their clients a fiduciary obligation.
• Exactly how the fees will be operating?
• If there are additional hidden costs?
• Whether the advisor provides references from their previous clients?

Benefits of Seeking Advanced Investment Advisory Services 

• Develop an overall individual financial plan
• Receive daily check-ins regarding advancements in financial objectives
• Reduce tax burdens
• Get usual financial suggestions
• Enhance your investment performance 

Must Read,

• Investment Banking Courses in the World
• Investment Banking Courses With Placement
• Investment Banking Training Programs
• Investment Banking Certificate Courses
• Investment Banking Institutes
• Investment Banking Courses for Beginners

Disadvantages of Seeking Advanced Investment Advisory Services 

After learning about the various advantages of collaborating with investment advisors, it is time to know the disadvantages of working with them.

You must first feel at ease with the thought of having someone else manage your investments. It is crucial that you feel confident talking to your investment advisor about your financial goals and issues. Secondly, fees are typically charged by financial advisors for their services. If you have a limited budget, this might not be a good thing. Third, not every advisor is licensed or registered under a Series 65 license. As a result, they might not be authorized to provide you with the best guidance possible given your needs.

Why Seek Advanced Investment Advisory Services?

• Here are some of the reasons why you should work with an investment advisor
• The investment advisors will help you save time and energy as they handle your investments
• Since they are in charge of your investments you can concentrate on the other side of your personal life
• They act as a protector against scams and frauds that target inexperienced investors

You should seek advanced Investment Advisory Services only if you are comfortable with the investment advisor handling your money.

It’s crucial to examine the benefits and drawbacks of hiring an investment advisor and determine whether the cost is justified. Before hiring an investment advisor, you must do proper research if you determine that dealing with one is the best option for you. Verify that the financial advisor’s attitude aligns with your own, that their charges are unambiguous and reasonable, and that they are licenced under Series 65 registration. 

As a client, when you hire an investment advisor you will be receiving useful advice regarding investment in securities like exchange-traded funds, bonds, stocks, or mutual funds. Few investment advisors supervise a portfolio of securities. 

Investment advisors are also called portfolio handlers, investment counsels, wealth managers, investment administrators, asset governors, or money supervisors.

Advanced Investment Advisory Service Professional Roles & Responsibilities

An advanced experienced investment advisor offers advice every day to a broad range of clients. There are two wide categories of these clients: 

Persons that include persons, family groups, families, and persons, and institutes that feature banking organisations, mutual funds, corporations, investment partnerships and also other pooled accounts, governments, private pension plans, educational institutes, private pension plans, hedge funds, foundations, and endowments.

As a qualified investment advisor, you will be employing several various investment fashions and strategies, like value or growth. Few investments advisor is mastered in investments in fixed income or stocks or bonds or equities, while the remaining handle portfolios that include investments in cash, bonds, and stocks.

A few advisors help in shaping investment portfolios for each of their clients. The remaining advisors continue to be with one or more centrally administered portfolios that show a particular investment model, strategy, or client. To further diversify his/ her portfolios, a client may hold onto several advisors with various investment ways as well as strategies.

Get Access to the Detailed Course Curriculum here

• Online Financial Modeling Services
• Financial Modeling Course Eligibility
• Sensitivity Analysis
• Financial Modeling Salary
• Scope of Financial Modeling
• Financial Modeling 

Paramount Skills Essential for Becoming a Qualified Investment Advisory Service Professional

Impeccable Communication as Well as Listening Skills: A smart investment advisory service professional is required to forge a personal relationship with clients to truly understand their financial objectives. You are ordered to learn when your client should invest and what is the purpose of the investment.

Amazing Finance and Also Analytical Skills: To provide valuable recommendations, a qualified investment advisory service professional must collect the personal as well as financial data of the client. He/she must learn about the tolerance power of a client when there are risks and the expected ROI (return on investment) rate. An excellent investment advisory service professional will utilise this data to examine ongoing investment and offer suggestions regarding the future course of action to be taken by the client.

Outstanding Organisational and Time Management Skills: An intelligent investment advisory service professional is familiar with the client’s investments, ascertaining that their portfolio is justified. Or else, you risk owning a similar form of investment in various accounts. 

Imperative Educational Qualification Required for Becoming an Advanced Investment Advisory Service Professional

To pursue the role of an intelligent investment advisory service professional, the minimum educational requirement is a bachelor’s degree certificate. If you are a person who is specialising in the fields of financial management and accountancy, then also you can take up this role. Other than that, you must also earn a certification – (NISM) National Institute of Securities Market Series-X-A –Investment Advisor (Phase 1) as well as National Institute of Securities Market Series-X-B – Investment Advisor (Phase 2). This certification is offered by SEBI.

Why Should You Become an Investment Advisor?

A career in this field can be fruitful and the role of this job is satisfying. If you love to communicate with people and enjoy forging new relationships with clients you can assist them in meeting their financial objectives by providing optimal services, suggestions and financial solutions.

How Much Will You Be Getting as an Investment Advisor?

As an investment advisor, your capacity to earn more salary is reliant on how many clients you have. Investment advisors earn in the below-mentioned methods:

• A percentage of the assets’ value that handles for your clients
• Per hour or fixed & direct fee
• A mixture of the above

Best Investment Advisory Service Companies in India

Who should serve as your investment advisor? How are you going to know that? Here are a few of the Indian investment advisory firms that have been rated as the best in the country and that can give you the most insightful and accurate investment advice.

1. Bajaj Capital Limited

In India, the top investment advisory firm is Bajaj Capital Limited. The company’s main purpose is to assist investors with their investment plans as well as other insights by considering things from their point of view. The company provides financial guidance about investments in bonds, real estate, pensions, mutual funds, company fixed deposits, initial public offerings (IPO), post office schemes, and mutual funds.

2. BTS Asset Management

The necessity for the country’s expansion in terms of money and its capacity for financial investments led to the creation of BTS Asset Management or also known as BTS Investment Advisors Limited. The organisation prioritises integrity, confidentiality, and fairness above all else to achieve its goal of being the top provider of growth capital in the country. The company asserts that offering financial guidance to numerous Indian businesses, helped them in growing financially and expanding.

3. DSP Merrill Lynch Limited

DSP Merrill Lynch is a subsidiary of the famous Bank of America Corporation. The company operates as more than just a strategic advisor for numerous government organisations, firms, institutes, and individuals. It is one of the most well-known investment advisory firms in India and also makes a significant contribution to wealth management and the capital market. All of its clients receive assistance from this top securities underwriter and also trader firm with securities research, capital raising, trading, mergers and acquisitions, and sales.

Professional Courses from IIM SKILLS

• Digital Marketing Course
• SEO Course
• Technical Writing Course
• GST Course
• Content Writing Course
• Financial Modeling Course
• Business Accounting And Taxation Course
• CAT Coaching
• Investment Banking Course
• Data Analytics Course

4. Go 4 Advisory Services

The Go 4 Consultancy Services is one of the top research and advisory firms in India and is a branch of the Go 4 Group. The company’s main business is stock broking, but it also has expertise in information stock, business analysis, and intelligence. The firm offers its clients comprehensive knowledge and technical expertise concerning stocks. Fast Moving Consumer Goods (FMCG), Real Estate, Plastic Industry, Picture Film Productions, Media, Broking, Internet, Automobiles, Analysis, Financial Services, etc. are just a few of the sectors the firm has expertise in serving as clients, along with many other prestigious organisations and individuals.

5. Kotak Private Equity Group (KPEG)

One of India’s top equity firms is Kotak Private Equity Group, also known as KPEG. For medium size enterprises and corporates to become leaders in their industries, it offers other value-added services in addition to strategic support and equity capital services. The firm has been recognised as the “Most successful Equity Broker in India” at the 2008 CNBC Financial Advisor Awards.

6. Paar Tax and Investments Consultants Limited (PTIC)

Often referred to as “PTIC”, Paar Tax and Investment Consultant Limited majorly offers financial services to its clients. The firm usually provides suggestions to its clients that are related to investment portfolio management, retirement planning, insurance planning, and financial planning. Be it software organisations or professionals, the firm serves clients from different sectors of the business facets.

7. PN Vijay Financial Services Private Limited (PNVF)

PN Vijay Financial Services Private Limited or also called PNVF is mastered at offering services of global standards in portfolio handling as well as wealth administration. Along with its many products, its “Knowledge Centre” also trains clients on the state of the Indian economy, market trends, and stock values, enabling them to make sensible financial decisions.

8. River Bridge Investment Advisors Private Limited

The purpose of the financial advisory firm is to close the gap between ambitious corporates and well-known investors. It specialises in providing investment services that aid companies in raising capital. A group of seasoned experts from IIM Bangalore with experience in banking, credit rating, and financial services founded the Chennai-based firm. Financial Advisory Services, Acquisition, Strategic Relationships, Divestiture, and Capital Raising are some of the services it offers.

9. SONG Investment Advisors India Private Limited

Investment management is a speciality of SONG Investment Advisor. This investment advisory firm excels at constructing demonstration models to show how investments in Small and Medium Enterprises (SMEs) also earn sectoral investment but also yield positive stakeholder returns in addition to being profitable. The company not only gives entrepreneurs the correct strategic and capital market insights but also assists them in fulfilling their dreams. The company also advises investors to put their money into projects that will allow them to earn a return greater than what they first invested in. By doing this, the firm creates a middle ground between the two industries.

Also check,

• Strategic Financial Modeling
• Financial Modeling Course For Beginners
• DCF Financial Modeling
• Can I learn Financial Modeling on my own
• Financial Services Outsourcing
• Equity Research
• Leveraged buyout
• Scenario Analysis
• Investment Banks In India 

10. Unit Trust of India (UTI)

The Unit Trust of India, also referred to as UTI seems to be a financial firm that provides services for financial products and investment advisory. The “learning centre” of UTI is an online website that provides clients with an online financial guidelines. This investment advisory firm not only offers guidance to help businesses navigate the ideal investment route but also helps them make the best decisions for wealth and financial management.

Frequently Asked Questions

Q1. Who is an investment advisor?

When a firm or person provides valuable suggestions to its clients regarding the sales and purchases of securities for some substantial money then that person or firm is an investment advisor. 

Q2. What skills should I develop to become an investment advisor?

To pursue the role of an investment advisor, you must know the core steps in the advisory method that contains formulating and executing a financial plan. Learn how to examine various financial products, their applicability and how the suggestion of the same can affect investment risks, strategies, as well as returns within the personal finance atmosphere for potential investors and also general investors in the market generically. You must be well versed with the legalities, income tax, and, also wealth tax of estate planning within regulatory as well as personal finance facets underlying advisory that is absolutely critical. You should get familiarised with financial planning as a technique for retirement planning, insurance, investing and assistance for advisors to forge ever-lasting relationships with their clients.

Q3. What is the average salary of an investment advisor?

Initially, when you start as an investment advisor you will be getting an average salary of Rs. 302524 per year. The salary amount includes tips, overtime cost, and, bonus. Investment advisors with a work experience of one to four years will bag Rs. 383972. A person within five to nine years of work experience will get Rs. 540000. While someone with nearly two decades of experience will get Rs. 770000.

Q4. How will my career progress as an investment advisor?

Starting with nothing but an internship in almost any financial organisation is encouraged if you want to become an investment advisor because it will improve your understanding of financial processes and products and provide you time to complete the relevant SEBI examinations and certifications. Generally speaking, investment advisors can launch their own practice or start working for any organisation within the financial services field after earning their certification.

Conclusion on investment advisory services

For individuals trying to safeguard their financial plans, investment advising services might be a useful tool. You may defend your family, reduce your tax liability, and make better decisions about investments by selecting an investment advisor that knows your financial objectives and is prepared to partner with you to achieve them. Collaborating with nothing but an investment advisor can have certain drawbacks, so it’s crucial to consider both of the sides before deciding.