Two myths debunked about financial advisors

1. An independent financial advisor does the same job as a non-independent financial advisor A non-independent financial advisor is an advisor that works for a bank institution. He or she has a duty to this institution and consequently has to favor the products his or her institution has to sell. We actually know many financial advisors working for major banks who just do that because they simply do not have a choice. On the other hand, an independent financial advisor does not have this issue and does not have products to sell which means that his or her interests are more aligned with yours. Our table of financial advisors comprises only independent financial advisors. 2. If I have a small amount to invest, most financial advisors if not all will not be interested in taking me as a client That is a very common misconception. In reality, the vast majority of financial advisors accept clients even if they do not have a huge amount to invest. Why? Simply because the fact that a prospective client does not have a lot of money to invest right now does not mean that he or she will never have more money to invest. What is of interest for financial advisors is to understand the motivation and the attitude of these potential clients. It is, however, true that some financial advisors have a minimum amount required to start investing but this amount is most of the time quite low.

Ponzi pyramids and their consequences

The Madoff investment scandal was a major case of stock and securities fraud discovered in late 2008. Since then, Ponzi pyramids have caused an approximate $60 billion in losses only in the United States. Still in the US, more than 800 of these financial scams resulted in 8,000 years in prison for their instigators. The United States is of course not the only country affected by pyramids. In fact, the North-American country is actually less impacted than many others for the simple fact that regulation is more developed in the US than in most other countries. A Ponzi scheme is a fraudulent investing scam promising high rates of return with little risk to investors. The Ponzi scheme generates returns for early investors by acquiring new investors. The common point to all pyramids is that they promised unrealistic returns on all assets without the need to take risks. If an adviser finds you an investment with a known return above let's say 5% be careful. It does not mean that it is not possible to find such investments, but in order to obtain more than 5% any investor will need to take risks and the exact return will not be known in advance.

The rise of robo-advisors

Everyone has heard of Artificial intelligence and how it will certainly revolutionize the World. AI has been around for quite many decades now and some people have lost hope in it, but AI has recently made some tremendous improvements that will change the way we think about money and investments. AI is in fact now emerging in a new area of the financial World: the financial advices. This new trend, which is developing at a rapid pace, will have many tangible applications for individuals. Two of the best applications of AI in the financial field are the use of "chatbots” and the development of robo-advisors. Chatbots are AI programs that simulate interactive human conversation. Chatbots (which exist already) will allow clients to have immediate responses to most of their questions at any time. No need to wait for your advisor to be back in his or her office anymore. The second application are robo-advisors. Robo-advisors are digital platforms that provide automated, algorithm-driven financial planning services with little to no human supervision Robo-advisors have (at least in theory) the advantage of offering unbiased (whether emotional or financial) recommendations to the clients. In short, artificial intelligence is making possible to automate a set of very complex tasks, such as analyzing large amounts of data, while having the capability to deliver custom-made solutions to each individual. This is a revolution that will not affect the financial industry specifically but all areas of our lives.

There is little doubt that financial advisors have a difficult job

There is little doubt that financial advisors have a difficult job. The job requires many different skills and the clients can be extremely demanding. The job includes many different aspects as we have seen over the last entries on our page. The financial advisor, regardless of the country he or she is based in, has a duty of care about the types of products and services he or she offers to his or her clients. That is that a financial advisor has to know his or her clients characteristics very well and cannot advise the same product to all of his or her clients since they are all different from each others. In other words, that means there's no one-size-fits-all solution. It is, among other things, the financial advisor responsibility to make sure that the tax impacts of the investments that he or she recommends are fully understood by the client. The financial advisors also need to make sure that he or she stays abreast of trends in the economy and the markets. This is easier said than done. Because of all the complexities of the job, financial advisors needs to keep learning all the time. As time goes on, financial advisors tend to be more and more qualified. Many financial advisors have MBA, CFA or other qualifications. Financial advisors are expected by their employers to maintain or even enhance their knowledge through continuing education.