Discrimination in Financial Advisory jobs?

Nowadays, as you have certainly already noticed, there are statistics about almost every topic you could think about. Statistics is something that you come across all the time when you are passionate like we are about Finance. We have recently looked at different studies in respect of relation between races, gender and money management. As you could easily expect from the word “races” these studies are US-based. In fact, there are few other countries where race is such an important topic. One of these studies has shown that less than 4% of US Financial advisors are not White nor Asian. At the same time, 13% of American self-identify as being black or African American. An even larger part of the US population is made of non-white Latinos. Similarly, other studies have shown that an overwhelming majority of clients of financial advisors were White or Asian. The Center for Financial planning believes that changes need to be made in the profession in order to create a more diverse and sustainable financial planning profession. It turns out however that a vast majority of the clients do not care about the appearance of their advisers. Instead, they are looking for experience, knowledge and above all performance. Performance being often linked to experience and knowledge. It is also interesting to see that several other studies have also shown that blacks, generally speaking, are less likely to invest in stocks than whites because they are more conservative investors. This would need to be changed as well if minorities want to make more with their money.

The topics that good financial advisors should master

Like in many other industries and jobs, there are good (some are excellent) financial advisors and some that are less competent. Financial advisers should have the skills to independently advise individuals regardless of the complexity of their financial matters, Privacy should also be a key concern for a good financial advisor. One of the difficulties of the job is that a financial advisor should be able to address many different topics. These topics include (but are not limited) to Real Estate, Stocks investments, Insurance, Pensions and everything related to inheritance. Real Estate is a large topic. The advises needed by the client can be related to their own property (the one they live in) but it can also be a property that they own and rent. Of course, the nature of the advise will greatly vary between the two. Another large topic is related to investments in stocks. More than being a large topic, this is actually without any doubt a very complex one. Investing in stocks can seem easy at first glance but making money consistently on the stock markets is definitely not an easy thing to do. The financial advisor job is to understand his or her client’s profile and to provide him/her the best advises based on his/her unique characteristics. Insurance is less complex but requires a lot of knowledge. Pensions is of critical importance while inheritance closely related to household wealth. Divorces, remarriage and other unexpected changes make it difficult to tease apart the independent contribution of inheritances to wealth but without any doubt this is a key element.

Should a 70 years old French women use the same financial advisor as a 20 years old German man?

Should a 70 years old French women use the same financial advisor as a 20 years old German man? The question says it all. However, the response is not that easy to formulate. In fact, we would respond yes but no. It really depends on several factors. If both of these persons are looking for a financial advisor that would look after all their finance-related matters, there is absolutely no doubt whatsoever that the response will be no. In fact, in order to provide the best advice to a retired person living in France, the financial advisor should be well aware of the French legislation (or one could argue that he or she should even be French since the French legislation regarding taxes and other types of investment is extremely complex). The same goes for the 20 years old German man who should seek advice to a German advisor (legislation slightly less complex than the French one but still extremely hard to deal with for non-German advisor). So regardless of the age and professional situations, the only fact that these two persons live in different countries means that they should have different financial advisors. However, there is a clear case where these two very different profiles could use the same financial advisor. This case happens when these investors are looking for international investments. Our list of the best independent financial advisor takes into consideration this skill. In our views, investors nowadays cannot limit their investments to their local market. That is why our table takes into account among other criteria multilingual skills associated with top client services

Claire Mackay interview

Claire Mackay has been interviewed recently in The Sydney Morning Herald (https://www.smh.com.au). Claire Mackay, a financial planner and director of Quantum Financial, says businesses that are predicated on commissions and the selling of financial products have diminished the value of advice. "Consumers are not seeking product sales. They are seeking strategies and recommendations that help them put their family finances in a more secure position," she said. "Studies have shown that consumers who have a quality adviser, who is working with them on a strategy, are financially better off than they would be otherwise." The long article full of comments from some top financial advisors shows that a combination of higher educational standards, an end of grandfathered commissions and decreasing viability of financial planning businesses could see thousands of advisers head for the exits. In a way, the industry is struggling, but at the same time, the need for qualified and well trained financial advisors has never been that high.

Financial advisor: a job for men?

When you look at the entry-level echelon, women occupy roughly half of the positions of financial advisors. Interestingly enough this statement is true in most countries regardless of the wealth of the country. However, when you start to look at higher echelon, and more precisely in the executive positions, you find out that women occupy only 20% of the jobs. As McKinsey's stated recently in a very interesting study: "the more women progress in their careers, the more women lose ground to men: they are 24% less likely than men to be promoted in their firm. And this, even if they are as numerous as men to have ambition." Does this all mean that financial advisor is a job for men? Obviously not. It rather means that there is still a long way to go before equality can be reached between the two genders in this industry. We have had experiences with many financial advisors in order to compile our rankings tables and identify the best independent financial advisors in different countries, and it's true that overall we have been much more in touch with men than with women. Nonetheless, our experience and the clients' reviews that we could obtain show that clients do not rate their financial advisors differently depending on his/her gender. In other words, gender does not make a difference in being a good or poor financial advisor.

Requirements of the job of financial advisers

Today we are going to review the job of financial advisers. We will also try to understand what are the requirements to do this job properly. So, what does it mean and what does it take to be a financial adviser? Many of the financial advisers have a scientific background. Being good at maths is a requirement for this profession. Any financial advisor who manages a large portfolio has, of course, a (sometimes several) finance-related degree. These degrees or qualifications include CFA and MBAs from top universities for the best financial advisors. Even though there is no proper rule for this, an average financial advisor manages a portfolio of 100-500 clients. Here we are talking about clients with small portfolios. Therefore, even though the number of 100-500 clients may seem impressive at first, the overall amount under management remains relatively small. Of course, when it comes to the best financial advisors numbers are different. They tend to have far fewer clients, but clients with much bigger portfolios. A typical day in the job includes preparations of the interviews with clients. Meeting the clients and remaining in touch with their needs is of absolute necessity. Updating files and reporting activities also take a lot of time. The range of products that a financial advisor can propose to his or her clients can vary enormously depending on the company’s size and structure. These products can consist of short, medium and long-term savings real estate loans, property and casualty insurance, provident insurance but also stocks and bonds. These products can turn out to be extremely technical and it requires string educational background and continuous learning.

Women in the financial advisory industry

In the Financial advisory industry, men outnumber women not only in terms of the number of financial advisers but also in terms of the number of clients. Women do control roughly a quarter of all the wealth of the occidental world. Women earnings are also increasing at a higher rate than that of men and this is true in almost all the countries of the world. Women have also more degrees than men which could lead them to even faster earnings rise in the next future. It is also worth noting that 40% of women earn an income equal to or greater than their husband. So there is no doubt that the potential for more and more female clients for financial advisers worldwide is not a possibility but much more something certain. However, when we look at current statistics about financial advisors clients we see that a large majority of clients are males. But there is another interesting aspect of this topic: looking at the side of financial advisors themselves. What we find is that more than 80% of financial advisors are men. So basically we find the same proportion of men and women on both sides of the client/advisor relationship. These numbers mean that many women have money but do not use financial advisors but also that few women end up being a financial adviser. One of the reasons behind this lack of women in the financial advisory industry is that many more men study Finance in university.

Multiple ways to get access to equity investments

Many people in many countries have a lot of money to invest. The problem that many of these investors face nowadays is that making a portfolio growing at a respectable return is not as easy as it used to be. Savings interest rates are at the bottom or even in some cases negative. The question is then how to make money from your investments. Well, there is only one way: this is by taking risks. What about if you want to avoid taking risks? Well, you have only one option: put your savings in a bank rated triple-A by one of the top rating agencies such a Moody’s. However, if you go that way, you can be sure that you will find your money in your bank account but you can also be sure that the returns you would have made would be very close to 0%. Some people might argue that investing in real estate is not risky.. well when you hear someone telling you that you should just not listen anymore. Rates are certainly historically low, but property prices in most countries are also historically high. The risk of price correction in real estate is currently major. Therefore, if you are looking for real returns, you need to accept risks and the good news is that you do not necessarily need to have large amounts right now to start investing in stocks for instance. There are multiple ways to get access to equity investments with a small portfolio.

Choosing the right financial adviser

One of the top goals of our blog is to help clients to choose the right financial adviser. This is not an easy task for sure. However, if you keep in mind the below key points you should be able to avoid the biggest mistakes some people do when selecting their financial advisors. Key point 1: Ask you the following question: Do you really know who the person who manages or will manage your investments? You do not need to know the person who will manage your assets well but you need to be sure that you know if this is the same person that you are talking to when you have questions. Do not hesitate to ask your financial adviser if it will be him or her who will directly manage your portfolio. Key point 2: Never consider your financial adviser as a friend. Your financial adviser does not work for you for free and she or he is not your friend regardless of what he or she can say. Vigilance is always needed to avoid scams. Key point 3: Before investing, investigate!! Questions that you need to ask your financial adviser include the below: 1. What degrees do you have? A degree in an investment-related field from a top school should be required. 2. What are the fees and the fees system? Here we want to have a clear answer. 3. Can you explain me your general investment strategy? In our next entry blog, we will review the questions that you need to ask yourselves before choosing a financial advisor.

Bitcoin has become a good way for people to make money

Bitcoin is defined as a cryptocurrency, a form of electronic cash. It is a decentralized digital currency without a central bank or single administrator that can be sent from user to user on the peer-to-peer Bitcoin network without the need for intermediaries. Bitcoin has become a good way for people to make money. Yes, you read that right. Indeed, the best way (even though not a legal way) to make money with bitcoins may well be to sell financial products based on them or on other cryptocurrencies. Many national financial authorities (including the French and Italian ones) gave a call for caution to the investors interested in the bitcoin markets. Several players offer without authorization, investment services relating to derivatives the underlying is crypto-active. Among the players who are clearly out of the laws, are below: - www.bforfinance.com - www.xcoinbroker.com - www.coin-financial.com - www.gwt-capital.com - www.jbcapitals.com You should avoid these players at all cost. However, this does not mean in any way that if a player is not part of this list it is ok to trade with them. In other words, the above list is not only non-exhaustive but you also need to understand that it only comprises small parts of the existent frauds. There are also other types of Bitcoin scams. These include Hardware Wallet Theft, Exchange Scams, Fake ICOs, Cloud Mining Schemes, Multi-Level Marketing.

Salaries that financial advisors: expectations and reality

Recently, we have looked at the salaries that financial advisors can expect to receive. This is always a difficult analysis to do even though there is more and more available data nowadays. Of course, the salary or total compensation you can expect varies greatly depending on where you are based. In Switzerland for example, salaries are much higher than in the rest of Europe. On average, a Financial Advisor based in Switzerland earns 6800 CHF per month. At today’s exchange rates, that is equivalent to 6000 euros per month or 6800 USD. On a different note, it is interesting to notice the perfect parity between CHF and USD. Half of the financial advisers earn between CHF 5375 and CHF 8000. 10 % earn less than 4380 CHF per month but 10 % earn 10200 CHF or more. All posted salaries are based on a full-time workload and a payment of 13 monthly salaries. The gross salary (before social contributions) is displayed. If you are based in Geneva, salaries go even higher and the average salary for a financial advisor gets close to CHF 130k per year.