Last Updated on Mar 26, 2020 by James W
There’s a new trend of using robo-advisers for investment advice. When you use a robo-adviser, you give control of your investment capital to a computer program. It runs algorithms and tells you what you should invest in and can even invest the money for you.
In our world of instant gratification we tend to lean towards the quickest solution, but can a computer program provide the same service that a human can? When it comes to important decisions like where you live, or who you should marry, how often do you let a computer program make the choice for you?
When it comes to your money, you’d rather meet with an expert face-to-face. Right? That’s why human investment advisers are around to give you the tailored advice you need.
What Is a Personal Investment Counselor?
Do people out there still go to investment counselors? Definitely. It’s typical for people who want to get anything done at a high level to seek expert counsel. Business executives, sports heroes, firemen, and many others rely on coaches and trainers. In that same way, some people go to investment counselors to get advice on potential investment options.
There are two types of investment counselors, and you have to know what type you’re consulting:
- Registered Investment Advisers (RIAs): Have a fiduciary duty to give investment advice that puts the client’s interest first.
- Sales people: Can make money through commissions on the products that they sell and may offer items that provide more benefit to them than you.
Before you start working with an investment adviser in the U.S., make sure he or she is registered with the U.S. Securities and Exchange Commission (SEC) or their local securities agency.
How Your Investment Adviser Can Handle Your Finances
What will your investment adviser actually do? He or she will first ask you questions to get to know your exact situation, temperament, and goals, discovering your:
- Investment objectives
- Cash flow needs
- Current assets
- Time horizon
- And much more
The job of an investment adviser, like Fisher Investments, includes periodic review of a client’s portfolio while simultaneously advising them on any decision that changes the portfolio. Your investment adviser will build a plan involving investments and tactics that can get you to your goals.
There are generally two ways to work with your adviser from there:
- Pay a fee to get your investment plan and work with it mostly on your own.
- Let the investment adviser manage your investments for you, checking in occasionally to update you on new decisions.
What Returns Should You Expect?
Many investment advisers don’t claim to beat the market or give unusually high returns on investments. Then what good are they? First, they make your life easier. They let you focus on your career.
Second, they aim to invest the way you would if you had unlimited time to study investing. You don’t have that time! But they can take over that area of your life and invest your money using their years of experience and study. Returns happen gradually, and smart asset managers are patient and ready for a challenge.
Let us know in the comments if you think you need an investment counselor. What else would you need to know to make an informed decision? What are the top three qualities you’d want in your adviser?