Many people find the world of investments, stocks and shares exciting. Watching the markets, analysing trends and anticipating risk and reward is, for some, an entertaining pastime on top of a potential way to make money.
You might decide after some experimentation and trading that you have a skill for finance. If you build up your experience, you could either make money working for yourself within trading and investments, or if you want to forge a career within financial services the next stage would be taking formal qualifications, and then contacting specialists in wealth management careers such as ap-executive.com.
However, there are others who want the returns available from investments but who find the associated analysis too time consuming, complex or just plain boring, and want someone to manage their investments and wealth for them. If this is you, who can you trust to advise you on your next move? With so much information out there, who should you listen to about investments and what financial services are reliable?
The first thing to note is that you should avoid execution only brokers, as they will not give you advice, all they can do is carry out your instructions. If you use one of these brokers you will sign a declaration to say you received no advice at all, so if you want more assistance with decisions make sure this is not the sort of arrangement you get into.
When choosing an adviser, you should be aware that there are generally 2 types. Independent Financial Advisers (IFAs) offer products from the whole market, whereas tied agents can only offer certain products from companies with whom they have an affiliation or contract.
For example, a high street bank adviser is tied to selling products from their bank. They're job is to represent their bank and its financial products. They are essentially sales staff with targets to meet, so their advice is not independent and based on what is necessarily best for your money. They don't claim to be independent so their advice is legal.
There are also agents who are tied to several products, and they're known as "multi tied" advisors. Again though, as they work with specific companies they won't be giving you the whole picture.
So, if you go to an IFA for advice, it will be impartial and based entirely on what's best for you? Again, not necessarily. While they will be far more reliable than a high street bank, there are still certain things you should be wary of. IFAs get commission for every sale, and some companies such as National Savings and Investments don't pay commission to agents, so it is possible that your IFA could ignore these options. You could choose a fee only IFA, which means you will pay a fixed fee for their advice. Bear in mind you have to pay whether you take the advice or not, but you should receive a more impartial and considered service from someone who is not out to profit from your purchases. Even so, no advisor is infallible and human nature plays a part in decision making. Even the best wealth managers make mistakes and sometimes make recommendations based on personal judgement as well as analysis, so if you have the time and inclination always do your own research and deliberation before making a large investment.