No one wants to lose money, but you may want to make your money work for you by putting it into a diverse range of investments that have an element of risk inherent in them. If you have only a basic knowledge of how some of those investments work, then you would be well advised to use the services of a financial advisor to ensure your money is as safe as possible.
But what sort of financial advisor should you be using? There are two types of financial advisor, namely an independent financial advisor and a restricted financial advisor, and the advice they give may differ. An independent advisor is able to provide financial advice on the full range of products and providers that are currently available, whereas a restricted advisor has chosen to provide financial advice on just a few. Despite these differences, both types will have had to pass relevant training courses and acquire the necessary qualifications to practice as a financial advisor.
A financial advisor can provide advice to anyone who has money to invest, whether it be just a few thousand dollars, or millions. However, some financial advisors and their associated companies, such as ML’s Patrick Dwyer, specialize in advising ultra-high net worth families on their investment portfolios, which means he and his company are managing assets with a high value – often billions of dollars. Such is the high profile of Dwyer and his company that he has been ranked 53rd on a list of America’s Top 100 Wirehouse Advisors and has been the subject of several articles in magazines. Other advisors will work for the ordinary man on the street who wants to make the most of his savings.
But, on what sort of investments should you be seeking financial advice? Well, there are two types of investment that you can manage yourself, but for which it would be extremely helpful to get advice from a capable person. The first type is stock trading. To trade in stocks, you do not need to sit down and work at a specific time, nor take courses to gain qualifications; you do not even need a huge amount of capital to get started. What you do need, however, is knowledge about how the stock trading system works and how to make your transactions, and above all, what to trade in. Put simply, you have to know what is hot and what is not, what will make money and what will lose it. Yes, you can do your own research and find these things out, but it takes a huge commitment to do this sort of homework. Stock trading also benefits from experience, which you will lack if you are just starting to trade. A financial advisor will have that experience, and will be able to identify trends in stocks, advise you on what to buy and when, and perhaps more importantly, when to sell to keep your money safe.
Then there are hedge funds, in which a person invests to seek higher net returns or to create a diversified investment portfolio. The only problem with hedge funds is that higher net returns are not guaranteed, with some experts believing that only a good manager can make a real difference in this regard. Another important aspect of investing in hedge funds is to know when to do so and develop a suitable strategy. This is where a financial advisor can prove invaluable. The same applies to diversification in hedge funds. In this scenario, the investor is exposed to a number of risks, with each risk needing its own appropriate strategy for management. This is really not an area where a do-it-yourself approach works. Someone who can work out these strategies for you will help to keep your money safe, or at least as safe as your money can be when exposed to these sorts of risks, although on average, studies have determined that hedge funds can be less volatile than markets. When looking for a financial advisor, there are several questions you should ask, including asking what their fees will be, what products they are able to provide advice on, the qualifications they hold, whether they have other clients who have similar circumstances to yourself, and whether the advice they offer will be ongoing.
To keep your money safe, it is wise to employ a financial advisor who will guide you through your investments, rather than having to rely on your own limited knowledge and experience.