The stock market has a long history. It started with one product, and since then, a lot of new products have been introduced by the capital market. Especially in the last 50 years, stock exchanges and other participants have worked very smartly to introduce new innovative products based on customers’ needs. Stock market participation is also increasing over time, numbers have changed drastically in the last 20 years, and the Corona phase has taken it to new heights. We have seen the number of Demat accounts has doubled since Corona.
When so many new participants come into the market, it becomes very important for regulators and other intermediaries to keep investors’ interest in the market and protect them from any kind of fraud. Here investment advisors play an important role in educating their clients on the capital market and in guiding them on the right product, as sometimes clients get confused about product selection amongst the huge product basket.
Who is an Investment Advisor?
An investment adviser is a person capable of overseeing the management of your financial assets. In addition, he may make investment recommendations on any type of financial instrument like Equity, Debt. Investment advisers are employed by organisations that are registered as ‘Investment Advisor’ from regulating authorities, like SEBI in India. Education like CFP (Chartered Financial Planner) puts additional value to their credentials. Additionally, an annual fee may be charged depending on the size of the portfolio. Investment advisors help their clients evaluate how aggressive they can be with investments and how much risk they should take. Successful investment advisors are able to blend analytic skills, a thorough financial understanding, and client-facing skills to help clients identify and achieve their financial goals. Whether you are investing passively or building a more active portfolio, a financial professional can help you reach your investment goals faster and efficiently.
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It is better to hire an investment advisor, especially if the investor is unfamiliar with financial products. They make certain that only the best investing techniques are used throughout the process. Choosing an investment adviser is the best option for people who want to invest but do not have a thorough understanding of financial products.
Some investors lack the time to manage their portfolios but are well-versed in their investments’ financial aspects. Such investors may choose to work with an investment advisor. They help with the frequent monitoring and portfolio adjustments required to keep up with the ever-changing market conditions and situations.
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A financial advisor can assist you in making sense of all of these responsibilities. Financial advisers may comprehensively analyse your financial position and assist you in developing a financial plan to ensure that your actions are consistent with your long-term financial objectives.
A financial advisor can assist you in developing an asset allocation that is appropriate for your objectives and in adjusting it if your goals change as you grow older. Meanwhile, financial experts can assist you in safeguarding your assets, which becomes increasingly crucial as you approach retirement. With the assistance of a financial counselor, you can make sure that you are prepared to retire whenever you choose.
(By Ravi Singhal, CEO, GCL)
Disclaimer: This is the author’s personal opinion. Readers are advised to consult their financial planner before making any investment.