What Is an Investment Consultant?

An investment consultant is a financial professional who provides investors with investment products, advice, and/or planning. Investment consultants do in-depth work on formulating 澳洲幸运5官方开奖结果体彩网:investment strategies forඣ clients, helping them fulfill their needs and reach their financial goals. Many financial advisors and financial planners would be considered investment consultants.

Investment consultants have experience in many different facets of the financial world and may work independently for a bank or an investment firm. They are usually educated in a financial field, have experience in the 澳洲幸运5官方开奖结果体彩网:financial services industry, and be licensed to work.

Understanding Investment Consultants

An investment consultant works with clients to form an investment strategy. Clients may be individuals or businesses—small businesses to larger corporations. The investment consultant is responsible for reviewing the client's financial situation and formulating a plan to meet their goals. Their duties include actively monitoring the client's investments and working with them as their financial objectives change over time. Because of the nature of their work, many investment consultants develop long-term working relationships with their clients.

These financial professionals work in various settings, including banks, 澳洲幸运5官方开奖结果体彩网:asset management firms, and private investment companies, or 💙work independently. They provide an essential service to their clients, helping the𒁏m organize their finances and improve their financial situation.

Experience and Pay for Investment Consultants

Becoming an investment consultant requires a college degree and work experience. Some of the critical skills an investment consultant needs are problem-solving, math ability, and communicati๊ng clearly and effectively. This last skill is important because consultants may need to explain complex financial ideas to their clients and be objective in the face of emotion.

Investment consultants receive remuneration by charging fees and/or commission and may also receive a set salary. PayScale reported the average annual base salary for an investment consultant was $73,057.

The closest occupation to an investment consultant under the U.S. Bureau of Labor Statistics (BLS) is a personal financial advisor. The median pay for a personal financial advisor in 2020 was $42.95 per hour or $89,330 per year. The job market for personal financial advisors is expected to grow 5% from 2020 to 2030.

Types of Investment Consultants

In🧸vestment consu🤪ltants may fall into four main categories:

Registered Representatives

These are investment consultants, including stockbrokers and banking representatives, who are paid a commission to sell investment and insurance products. They work for what is known as sell-side firms—financial organizations that create, promote, and sell financial instruments. Registered representatives typically hold a Series 6 or Series 7 license.

Financial Planners

Investment consultants who manage their clients’ personal finances are known as financial planners. They may develop a financial plan to help a client manage college tuition fees. Qualified financial planners hold a 澳洲幸运5官方开奖结果体彩网:certified financial planner (CFP), 澳洲幸运5官方开奖结果体彩网:certified public accountant (CPA), or personal financial specialist (PFS) certification🦩.

Financial Advisors

These investment c𝄹onsultants give general and personalized financial advice. Their compensation is based on charging fees, and they ty💜pically hold a Series 65 or Series 66 license.

Money Managers

Investment consultants who make investment decisions on behalf of a client are called money managers. Money managers 澳洲幸运5官方开奖结果体彩网:work for buy-side firms such🐻 as asset management firms, fund managers, or hedge funds.

Qualifications for Investment Consultants

Investment consultants usually have a bachelor’s or graduate degree in a finance-related discipline such as accounting, business, or economics. Although it's not a requirement, they may also complete coursework in investments, taxes, risk management, and estate planning. In addition, investment consultants may seek professional credentials such as the 澳洲幸运5官方开奖结果体彩网:chartered financial analyst (CFA) or certified finaཧncial planne꧒r designation.

In the United States, most investment consultants are licensed by the Financial Industry Regulatory Authority (FINRA), an independent regulator. The 澳洲幸运5官方开奖结果体彩网:Securities and Exchange Commission (SEC) oversees the activities of investment cons⛄ultants from the government leve෴l.

Choosing an Investment Consultant

Research an investment consultant's background before hiring their services. Review their compliance records and check for any serious breaches. For instance, check to see if they have been investigated for insider trading. It’s also prudent to check their fiduciary status and criminal record.

Check an investment consultant’s certifications to ensure they hold the correct licenses. Assess their education and association memberships to determine if they have the necessary experience and expertise. Before selecting an investment consultant, it's always a good idea to organize an in-person meeting to determine if they understand your financial goals and are accessible.