investment consultant

investment consultant

When people come across the title ‘investment consultant’, they picture the stern looking guy in a dark suit that tells you what to do with your money. There has always been a level of misconception as to what the exact functions an investment consultant is. In a nutshell, an investment consultant is a professional advisor that offers services such as long term investment planning, pension asset management decision-making, performance measurement and evaluation, and other strategic financial services to their clients for a fee.

They are sometimes taken hand-in-hand with financial advisors and that is because there is no major difference in their duties. Investment consultants just usually focus on investment and related needs. If you are the type that hates dealing with or managing money, you would be definitely need a professional hand.

The need for a private investment consultant or one for an organization is not usually glaring. We tend to leave the totality of all numeric and financial work for the accountant or finance team. We expect them to come up with strategies, maintain financial statements, correct mistakes, be wary of fraudulent activities, and many more. However, an accountant should ordinarily not do all.

For one, the job of an accountant is rigid as he has to follow dogmatic principles to the letter. An investment consultant on the other hand is flexible and able to spot loopholes to ensure your financial stability in the long run. Note that an investment consultant primarily offers advisory services and makes financial decisions. Here are a few reasons why you need the services of an investment

  • Financial Strategies

An investment consultant comes up with worthwhile financial strategies and advices his/her clients on how to deploy the right mechanisms to ensure growth. Why exactly do you need a financial strategy? Well, financial strategies are usually long term plans that set out how individuals or organisations finance their overall operations to meet their long-term or medium-term objectives now and in the future. Hence, it enables you assess your financial needs and helps you manage your financing sources.

Where you are unsure of the direction of your organization financially or in terms on investments, it is important to obtain the services of an investment consultant. The costs of his/her fees compared to the possible losses that may arise from reckless and unprofessional plans and strategies are almost next to nothing. They usually offer guidance and advises that ensure that only the right processes are followed and caution is with organizational finances.

  • Experience

Investment consultants are usually qualified experts. From a string of accounting and finance related educational and professional qualifications to various related positions held; investment consultants certainly would understand your finances better than you would. Since not every investment consultant has the right amount of experience, with you lies the decision of either placing the finances of your company in the hands of a college graduate or in the hands of the big guns.

Yes, when it comes to experience, there would always be trade-offs. An over-qualified investment consultant would probably over-charge you. A less experienced one may give you bad advice. It does not always follow this patter regardless. An experienced investment consultant has seen it all. He would have gone through similar issues before and is in a better position to offer quality advice. His experience in finance and decision making will give you an edge over your competitors.

  • Portfolio Management

Where you have various lines of investments and strings of businesses, an investment consultant will be able to principally watch each of them. He can offer advice as to which are doing well for you to further invest in and those that are not making money for you to sell off or reduce funding in.

Portfolio management covers decision making on cost-benefit analysis and trade-offs, asset allocation, risk management, portfolio structure, diversification strategies, loan requirements and other related decisions. It is the duty of your investment banker to understand your needs and come up with plans that favour you and your organization. Even if you are professionally equipped with dealing with issues like these, you would need qualified third party opinion.

  • Profitability

Regardless of the type of business you are running, profit is undoubtedly a primary goal- well unless you are running a not-for-profit organization. Hence, to make financial strategies that are woven around profitability, wealth maximization, or cost control; you would certainly require the services of an investment consultant. He would provide services such as strategic asset allocation, after-tax investments, governance, segment profitability analysis, pricing strategy and so on.

He or she would tell you when to lock in profits or sell weak positions. The financial performance of any organization is highly volatile and unstable. The advices would help you reposition yourself or your company through changing times.

  • Reduces Stress

Generally, having an extra hand reduces stress. Rather than sweat yourself and worry about finance and investment matters, you can leave your investment consultant with the financial burden while you handle other pressing issues. Since your consultant will have your own interests at hand, the services he offers would be personalized.

In essence, he is a fiduciary to you and your organization. You pay for the convenience he or she provides and, by so doing, you save yourself and your organization mental stress.

Asides the above reasons, it is always advisable to decentralise company roles for effective performance and the smooth running of any establishment. Two or more good heads are better than one great head any day. Principally, even if you do not secure the services of an investment consultant or a financial advisor for the day to day running of your firm or company, you would them at the following instances:

  • When you are in financial difficulty
  • When you are about to make a big financial decision
  • When you are about to make a risky decision
  • When you need to restructure your organization