Who is Investment Advisor and Why We Need Advisor?

Business Knowledge

Investment advisors are financial experts who provide their expertise vision to peoples, businesses, and organizations in their financial matters. Investment advisors give advice to people while analyzing financial matters or guide them before investing their money in any plan like a retirement plan, buying any insurance policy, or any other investment plan. These investment advisors provide their service and in return, they charge some amount of fee. All investment advisors need to register themselves under the Securities and Exchange Commission.

Investment Advisor

How Investment Advisors Serve you?

Investment advisors provide their services in all the money matters and in return they charge a fee. Their professional approach towards financial matters is always accurate. With their guidance, your investment will never fail.  Investment advisors give committed duty towards the client and give them the best results in which the client is interested. They help clients in choosing their retirement plans and also helps them how to do investment in the market and for what time period. 

These advisors always ensure that the client will always get better output and their priority is always given to the client. Client suggestions will always be taken care of and after the client’s suggestions, the advisor will make the plan where to invest and how to invest and in what ratio the investment will be done.  Investment advisors always avoid getting the conflicting interest of their investment. With the help of a compensation structure, these advisors can avoid conflicting interests. Also. by linking the client’s growth with their growth.

These investment advisors always work on the behalf of the client and they have the decision power whether to invest in this plan or not to invest. There is no requirement for formal permission. The discretionary authority power is already provided to the advisor by the client. This will give a smooth and safe process of investment. 

Investment Advisors are Required 

These are a list of investment plan in which a registered investment advisor are eligible to give advisory to the client and able to use the authority to invest in the plan. 

  • Any type of insurance
  • Government and private sector schemes
  • Bank fixed deposits, recurring deposits,
  • Small savings
  • Pension & annuity
  • Mutual Funds
  • Income Taxpaying and saving 
  • Long term deposits

Process to Register an Investment Advisor

 These are steps to needs to be followed while registration of an investment advisor:

  • Visit the SEC official website: firstly you need to visit the official website of the Securities and Exchange Commission online website.
  • Fill out the details: In this step, you need to enter the complete details of the application form. After filling in the details you need to click on the submit button and that will redirect you to the payment page. There you need to do the payment process. Before the ways of payment option appear you need to enter the login details which you enter before the application form. After this, you can proceed with the payment process.
  • Confirmation: After doing the payment, the applicant will receive the confirmation mail on the registered id. After 7 days, you will get the confirmation mail of the payment. 
  • Attach the Documents: after the confirmation, now you need to attach the documents, and the declaration document required for the registration. The attachment of the documents will be done within 14 days after the confirmation mail.
  • Fill the Form A:  After attaching all the documents, you need to login into the official site for further process.  Now go to the investment advisor registration option and this will take you to Form A and this form is having many sections this needs to be filed by the applicant:
    1. General Details: In this section, you need to enter the name, address, place of business, and other registration details.
    2. Applicant Details: In this, you need to enter the identity proof, address proof, qualification documents,  examination certificate, and net worth certificate of CA.
    3. Business Plan: In this section, you need to upload a copy of the business plan proposal 
    4. Infrastructure Detail:  in this, you need to enter the infrastructure details like office address, office equipment, etc.
    5. Execution services: In this section, you need to enter how you will offer and distribute services to clients. 
    6. Miscellaneous Declaration:  In this section, the applicant needs to submit the declaration content that he/she is fit for the regulations and they will not take any other amount except the fee.
    7. Declaration Statement: in this section applicant will tell all the information and document are attached are original and the applicant is certified and qualified for the requirement.
  • Wait for Response: Now you need to wait for the response from the SEC. it will take one month time to respond and the verification of the documents. 
  • Issue of the Certificate of Registration: the certificate will be issued through the post and the confirmation of the registration will be notified through email. 

Types of Certificate Required to Become an Investment Advisor

  • Professional qualification whether it will diploma or degree in the subjects of finance, accounts, business management, commerce, economics, capital market, banking, insurance. You need a certificate of any on this PG qualification
  •  With a graduation certificate in any field and must be having 5 years of experience in the field of advisory services in finance, assets, funds, etc. 
  • With post-graduation certificate holders in the field of finance or similar subjects & with 5 years of experience in the financial sector.  
  • Certificate of NISM – Series-X-A: Investment Advisor (Level-1)
  • Certificate of NISM- Series – X-B: Investment Advisor (Level-2)
  • Need Financial Planner certification
  • Certificate from CA for Net tangible assets for an individual or in case of the partnership firm more than 2 Lakhs.
  • Certificate of Net worth shall be not less than INR 25 Lakhs.

Fees structure of Investment Advisor

All the professionals are having their own set of fee structures. Few investment advisors use an annual fee structure. In this annual fee structure, they use the percentage of the assets to manage for the client. The percentage ratio is higher and smaller and the percentage shrinks. 

For Asset management investment advisors use different fee structures. Some use hourly rate structure, some use flat fee, some use quarterly and some take fees and the commissions also. 

Need of Investment Advisor

If you are having knowledge of the market and investment plans then you can take investments decision yourself. If you are not aware of the market and its investment plans, it will be difficult for you to make the decision yourself. for the investment process, you need professional advice. If you are facing a financial issue then also investment advisor can help you. With the professional vision, you can do wonders. You can also take help from Robo-advisors also who are straightforward and inexpensive also and their accuracy level is high. These Robo-advisors use a computer algorithm to manage the portfolio.   

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