Monday, December 21, 2015

How to choose the Right Investment Advisor

Choosing the right Investment advisor can be so discouraging with various advisors proving to be of experience in both quality and service rendering making it difficult to decide the best for you.
Getting the right advisor become more tasking. As no one wants to pass through the rigorous stress of the planning phases many times.

If you wish to get the right chose of an advisor at the first attempt, Here is how to ensure you get it.

1.   Define why you need advisor for: Before setting out for an advisor, Try to think of the need. Ask yourself the following questions about why you need the advisor for:

·         To help you outperform and advise you on your investment accounts.

·         To help you stick to personal finance plans or long term investing.

·         To help you device a means out of debt in order to meet your personal finance objectives.

·         To serve as an ad-hoc advisor when it comes to making financial decisions to include refinancing and investing.

When you have gotten answers to the above questions, you will be able to stream line the right advisor for you. Also companies like Openwork can help you find the best investment advisor

2.   Know what you want to pay for: Financial planning services are always charged on a flat fee basis while investment accounts normally operate in one of commission, fee based, or combining both.

A fee based financial planner would be preferable for a simple finance issue while an investment advisor or a broker will suit your investment. If you need someone that will oversee your financial life, then an advisor is to be considered to focus on full service provision.

A commission payment is achieved through trading with investment account. Your advisor gets commission from Mutual Fund Company for every mutual fund sale done. The fees are clouded which can lead to trading your account too often by some selfish advisors. On the other hand a fee based account involves charging of a flat percentage on assets for the management of account.

The advantage here is that you get to know how much your advisor is being compensated with since he gets the payment from your account makes everything to be transparent. Fee based is not good for an investment account while commission based account is preferable.

Keeping your account on commission bases is cleaner and cheaper because fee is generated only when something happens.  Since a trading account is wrapped into a fee based account, it might be better off with a fee based plan with no issue of an investment paying commission higher than the other.

3.   Get to understand the advisor approach: You need to know the advisor approach because an advisor investment approach tends to influence the kind of advice he/she will offer you. For example, the advisor views on debt, budgeting, will likely affect the advice he/she will give. Therefore you will need to take some time to understand the advisor approach if they make sense, seems weird or scary, how do you reason the opinion.

4.   Get to know the advisor personality: In conclusion, you want to know if you will enjoy and trust who you want to work with as some may prefer to have an advisor as a confidant while some prefer to operate formally. Others prefer an older person believing that they are more trustworthy to work while to some peers is their favorite.

Finding from different Investment advisors, to get the right advisor may be a difficult task. Following the above four steps will certainly help you get that advisor that fit your standard.

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Sunday, December 13, 2015

CFA vs FRM. Which certification is better?

CFA or FRM. When pursuing a finance career, students often ask these questions: shall I get the CFA (Chartered Financial Analyst), or FRM (Financial Risk Manager) certification, or both? Which one is better for investment banking, portfolio management, hedge fund, or quantitative analysis? Do these certifications have any long-term value? How tough are they?

As a first tip: both qualifications are well-recognized standards in finance; their attainment demonstrates to the employers your competitive advantages, commitment to certain areas of finance, and your skills. But before committing your time and costs for either qualification, you should have a good idea the type of financial work you want to focus in three years. In reality, your practical experiences rather than the certifications are what really help you move up the ladder. 

CFA, organized by the CFA Institute, has become the de-facto and globally recognized certification for portfolio management and investment analysis while the FRM certification, organized by the Global Association of Risk Professionals (GARP), is gaining importance as businesses need better risk managers. 

CFA vs FRM - let us see how they compare.

Career and curriculum coverage
While both certifications focus on finance, the CFA certification covers a broad area of financial career including equity and fixed income analysis, portfolio management, alternatives investment, and investment advisory including wealth management. The FRM certification is more narrowly focused and is suitable for a career in risk management in banks, Treasury, or asset management companies. Around 5% of CFA holders self-report as risk managers as of September 2014. The CFA curriculum covers accounting, corporate finance, asset valuation (equities, fixed income, and derivatives), portfolio management, alternatives, and ethics. 

The FRM curriculum has some overlaps with that of the CFA in terms of financial market products, asset valuation, alternatives, and ethics although it clearly emphasizes risk management (enterprise, credit, operational), risk models such as value-at-risk, Basel regulations, and quantitative analysis. If you want to be a risk officer, a FRM is clearly the right qualification to have because it gets deeper into risk assessments and forecasts.

Preparation, costs, and certification requirement
To earn the CFA charter, you have to pass sequentially 3 levels of CFA exams, which take place in June (except June and December for level 1), possess an international passport, have at least 4 years of investment-related experiences, and join the CFA Institute as a regular member. The registration and material costs for 3 levels are US$900 to 1,300 per year with a one-time enrollment fee of US$450 for level 1 as of 2015. Candidates have reported about 6 months of preparation and 300 hours of studies per year. 

To receive the FRM certification, you need to pass sequentially 2 parts of multiple choice-only exams, which take place in May and November each year with the option of taking both exams on the same day. You also need 2 years of related experiences. No prior qualifications are required to register for exams although you have to pass the second level within 4 years of passing part 1 and finish the work certification within 5 years of passing part 2. The registration and enrollment costs for the 2 levels are US$1,250 to 1,600 per year for level 1 and $950 to $1,300 for level 2 with a one-time enrollment fee of US$300 for part 1 as of 2015. Candidates have reported about 240 hours of studies per year. The passing rate for both CFA and FRM exams is between 40 to 50%. 

Choose one or both?
Both certifications are internationally well-known for finance professionals, enhance the employee’s long-term value, and are trusted by employers. How you choose depends on the level of specialization you want and your background. CFA is more broad-based and opens up a number of career options. FRM has a more quantitative and mathematical tilt while CFA has more accounting coverage. Quite a number of people first become CFAs and then decide to specialize in the area they want, for example, risk management, and hence they will also get the FRM.

Also Read :   MBA vs CFA. Which is better?                 FRM vs PRM. Which is better?
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Tuesday, December 1, 2015

Three Reasons That Your Business Should Be Investing in Silver

The mark of a good businessman is their ability to prosper in any financial environment. Although economic conditions can fluctuate rapidly, and industries can rise and fall in the space of months, the most talented entrepreneurs possess the skill, tenacity, and foresight to withstand even the harshest of assaults.

One of the most effective methods for safeguarding a business is diversification. It is far more practical to rely on multiple sources of income than it is to expect a single industry to sustain you through thick and thin, and this is one of the key reasons that many companies choose to invest.

Precious metals, especially silver, are a particularly popular choice. Here are just three of the reasons why you might want to make them the next string in your bow…

Silver is a Safe Haven Investment

The shine of silver has appealed to mankind since time immemorial, and like magpies, we have been drawn to its glitter over and over again. This constant demand makes silver and its fellow precious metals some of the safest assets in the world - a particularly appealing attribute considering the current global political upheaval. Through recession and ruin, war and peace, it holds its value and desirability, helping to safeguard businesses when industries fail to do the same.    

Silver is in Demand

Gold is perhaps the most famed precious metal in the world, but silver is a close second, and if recent figures are anything to go by, it could soon outshine is glittering sibling. The reason for this is simple: it’s more in demand than ever before. No longer a mere bauble, silver is used in industries around the world, acting as a key component in many tools, machines, and vehicles. This means that even when its demand as a safe haven asset wanes, it remains desirable as an industrial material, making it a savvy bet for your business.

Silver Offers a Range of Investment Options

If you need another reason to consider investing in silver, then its versatility may appeal. There are lots of different ways to invest in silver, from purchasing the physical asset through companies like BullionVault to investing in futures or companies that deal in the metal. This gives you a wide array of choices when it comes to finding an investment option that suits your goals, aims, and ambitions, meaning that you can pick the perfect product for your enterprise.  

Safeguard your future today: invest in silver.
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