Investment Professional
Investment Professionals include the following:
1. Fee-Only Investment Advisor (Registered Investment Advisor Representative)
2. Investment Consultant (Registered Representative with a Stock Brokerage Firm)
Description of Services
An investment professional provides professional expertise to the management of
investment assets held in retirement accounts, trusts, individual and joint accounts.
The difference between a fee-only investment advisor and an investment consultant
is that a fee-only investment advisor is compensated by fees directly from the client
and an investment consultant is compensated from commissions derived from the purchase
or sale of a stock or mutual fund.
What to Expect from an Investment Professional
Depending on the planned use of the funds, the time horizon for investing and appropriate
risk considerations, the investment professional should select suitable investments,
continue to monitor their performance, and make the necessary changes to reduce
risk and improve returns. When someone wants to invest funds to accomplish future
goals, a CFPN CertifiedTM investment professional would be expected to follow this process (Luke 16:11):
1. Establish the purpose of the funds being invested. The investment professional
should take the time to understand the client's personal and financial
goals, needs and priorities, as well as the purpose for the funds that are being invested.
This would include whether the funds are to provide for current income needs or future
needs, such as retirement, buying a house, college funding or a new business.
2. Discover the context of the investment assets. The investment professional should
determine the stage of life that the client is in, and how that affects the investment
strategy.
3. What is the big financial picture, and where do the investment assets fit in
the big picture? The investment professional should gather and understand the client's
complete financial position and how the investment assets fit into the client's
financial situation.
4. Determine the anticipated time horizon for investing. The investment professional
should determine the appropriate time horizon for the investment based on the client's
goals and objectives.
5. Discover the risk tolerance of the person investing. The investment professional
should assess the risk tolerance of the client.
6. Select and obtain suitable investments. The investment professional should select
and obtain the investment portfolio for the client based on the purpose of investing,
time horizon, and appropriate risk considerations.
7. Monitor the performance of investments. The investment professional should monitor
the investments on a regular basis and, as appropriate, make the necessary changes
to reduce risk and improve returns.
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