In a rapidly changing world, Investment Consultants have a variety of responsibilities. Whether they are providing financial advice on an individual basis or on an institutional level, these professionals must be knowledgeable in a variety of investment fields. As an asset manager, they must consider both quantitative and qualitative factors, including total assets under management and long-term returns. The latest technological advances make it easier for consultants to track and analyze performance results, and proprietary databases help them keep track of many intangibles.
Although many investment consultants focus on the large firms and investment firms, they do not necessarily look at small, emerging fund managers. As a result, they may choose asset managers with greater capacity for new investors. Ultimately, this could lead to higher fees for the larger, more established asset managers. The role of an Investment Consultant is to make sure your money is in good hands. While the investment industry is incredibly lucrative, it is a highly competitive profession.
Many investment consulting firms are now working with alternative funds and other innovative investment strategies. They have embraced the ‘net zero’ initiative and are committed to implementing initiatives that will help them meet their goals of net zero emissions. The NZICI has created nine actions to support its commitment to a net zero emissions goal. These are based on fiduciary and legal duties, as well as specific mandates from clients. Moreover, the commitment is to incorporate net zero alignment into investment consulting services within two years.
Some of the largest brokerage firms are replete with so-called fiduciary advisors, but this doesn’t protect clients from conflicts of interest. Be wary of these consultants unless you’re willing to check their credentials and track their every move. Ask for documentation of their entire source of revenue (such as annual 408(b)(2) disclosures). If the consultant accepts any fee, make sure to insist that they only accept an explicit hard-dollar fee for their services.
Unlike a broker, an investment consultant should be able to manage assets without conflict of interest. The consultant should be a fiduciary. The company must be a member of the SEC. Moreover, it should be in a position to comply with the SEC’s regulations. However, there are also some risk factors that investors should be cautious about when hiring a consultant. Some investment consultants may avoid introducing new clients.
Investment consultants must be aware of and compliant with GIPS standards. These standards are required by many institutional investors. These consultants are not able to comply with the standards set by the SEC. If a firm fails to meet these standards, it may not be a good choice for a client. Further, the investment consultant must be aware of the risks associated with the funds. An investment manager who is not GIPS compliant is not a good investment.