Twelve investment consultancies, working on a commission basis to advise large insurers and pension funds on $10 billion in assets, called for a review of the rules governing such relationships. The Net Zero Approach is a voluntary self-regulatory association that brings together investment management teams from across the industry. This is the latest in a series of moves by fund managers to try to reduce the conflicts that are common with investment advisory relationships. The twelve investment consultancies involved in the Net Zero project include the following: Fidelity Investments, LP Financial, Stone Street, Liberty Mutual, Prudential Securities, and Merrill Lynch.
The Net Zero Association says that its goal is to improve the relationship between investment consultants and fund managers. “The Net Zero Approach takes an holistic approach to selecting an advisor and develops a series of tailored, quality-focused approaches to identifying and managing the key roles and duties of these professionals,” the association states. They also say that this selection process will help to ensure that investment consultants “work together in a common cause to enhance investor protection.” The various projects that the Net Zero Project is undertaking include improving standards for fiduciary behavior and enhancing employee engagement. Additionally, the project is exploring measures to prevent conflicts from arising over asset management and finding ways to improve communication between fund and advisor.
While many people assume that investment consultants are independent contractors, the truth is that they often are integral members of financial services companies’ client and vendor relationships. For example, financial planners and investment consultants work with accountants, insurance agents, hospitals, and so forth. In addition, financial service companies may hire investment consultants as well as provide them with professional liability coverage. As is evident from any number of the annual reports about how many clients an investment consultancy has under contract, financial services companies value their relationships with their financial consultants. Many companies have policies that require them to use independent consultants and pay a reasonable price for those services. Additionally, some financial services firms have stated publicly that they rely on investment consultants to help guide their investment decisions.
An investment consultant can obtain an assortment of licenses while working independently. However, in order to be employed as a Certified Public Accountant or CPA (an accountancy designation that requires a four-year college degree), the individual must enroll in and pass the CPAs examination. In order to become a CPA, individuals must also complete a two-year bachelor’s degree from an accredited college degree program and pass the state exam. There are a number of other investment consultants certification programs offered by professional organizations, including the AICPA or Association of Independent Consulting Professionals.
The main difference between Certified Public Accountants and Graduate Assistants is that the former have completed both a four-year college degree and the four-year Ph.D. degree, which entails specialized study in the area of accountancy. This means that Certified Public Accountants are more likely to earn higher salaries and be hired at higher levels than their less-qualified counterparts. Graduates are less likely to earn, but the salary earned through a doctoral degree program is often worth double that of a regular certified finance planners.
The average salary for all accountants, finance professionals, and other graduate assistants is usually between thirty and forty thousand dollars annually. This amount is based on experience, location, and type of position held. For instance, the most highly-qualified finance consultants earn in excess of six hundred thousand dollars annually, although the exact figures may vary depending on the number of years spent on practice. The highest average salary received by a certified finance consultant is over seven hundred thousand dollars. While the exact statistics may vary for different types of jobs, a number of factors can be used to estimate the likely earning potential for graduates in terms of becoming a certified investment consultant.