We are all made of routines and resilient to new approaches. Like Albert Einstein once said: “Insanity is doing the same thing over and over again but expecting different results”. The purpose at this level 5, the final stage of Pedro Moreira’s Money Framework version presented by Euroconsumers Invest, is whenever your habits are, try something different, something new, time to time.
If you are unhappy with the outcomes from your investments, talk to a Financial Advisor. The only thing you will lose is 1 or 2 hours of your time at most and, eventually, the cost of the session, although the first interview is almost always complimentary.
Money Framework: from 1 to 5
Throughout the Money Framework map, we recommended the readers to search for credible information regarding the markets and its financial products. We also provided examples of the publications and some studies made by the Euroconsumers Invest’s Team Network. We advised using your company’s human resources professionals to get executive coaching (guidance to develop your professional career), to consult financial planners or independent financial advisors to help manage your family budget.
We reminded to go beyond the advice of the bank account managers. When it comes to investment, we urge investors to find other sources of information. Today, there are many alternatives with trustful financial information. Our financial bulletins sought to get precise advice on financial products. But at this fifth level of our map, we are talking about personalised advice that only registered experts can provide.
Stating that “bond A” or “Fund B” meets the conditions for buying it or invest in it is one thing. Another matter is to trace the investor’s profile, to analyse investors existing assets, verify the purpose of the investment and then advise whether to acquire or to invest on A or B. This makes all the difference during the investing process.
The Investment Advisors
There are several types of Investments Advisors. You can open an account to invest in the securities market (shares, bonds, mutual funds, ETFs) with a broker and inquire for a counselling service. For significant financial assets (starting at EUR 500,000), you can proceed to a wealth management company. But you don’t need to possess that amount of money to consult a professional advisor.
Financial Advisors are more eminent these days, meaning most savers can hire one professional consultant at a more affordable rate. They provide different services: some may be specialised on family budgets, credits or savings products others may cover the investment component. They can be independent consultants or affiliated to one or few financial entities.
Independent consultants have no arrangements with market entities, and their analyses are 100% oriented towards the best solution for their clients. To preserve their independence, they charge the client directly.
Consultants dedicated to company A or B tend to advise, in fact, the best solutions to customers, but within a minimal selection of products, mostly associated with the affiliated brands. This financially advisory is free to the client since the advisor will receive a fee from the product promoter. Hence, when hiring a professional take that in mind, but don’t let that keep you from trying the consultation with a qualified financial consultant. Take the test, and we assure you will find valuable information.
Financial advisory in the US
The United States (US) are a benchmark in terms of capital market investors. Both for social security and welfare grounds, which obliges practically every American citizen to prepare their retirement. A study conducted by the Securities and Exchange Commission (SEC), in 2018, (“The Retail Market for Investment Advice”), pointed to about half of American investors resorting to the Investment Advisors at least once in their investing career. A reality way far from other countries in the world.
The European reality
A report from the European Commission (EU), also from 2018, (“Distribution systems of retail investment products across the European Union”) provides a very different perspective than what goes on in the US showing the difficulties of access to products and quality advice. Generally speaking, those with more money and more education, as in the United States, tend to use more independent advisory services and not just consult their bank or insurance company advisory.
Therefore, the EU reiterates, “advice is an important tool to guide investors in their investment decisions. In doctrine, it should enable investors to look at a wider set of investment products, better understand their features and buy products that match their profile”.
Consulting an independent advisor
Still, we insist that you don’t need to be rich to consult an independent financial advisor. You can inquire your company’s HR department if they can offer this sort of counselling for you and your department colleagues. Or you can contact your local consumer association and seek if they provide Financial Literacy and advising services. If none of these offer this service, you can recommend them to contact Euroconsumers Invest to find a practical solution.
In Portugal, for example, some of these services are provided by Proteste Investe — Familly Office. For individual advice, you have the Tree Family Office, which is Proteste Investe’s Business to Consumer (B2C) brand providing financial counselling directly to individuals or family investors. For the Business to Business (B2B) side, you have Euroconsumers Invest brand which works directly with entities and companies.
Family Office’s benefits
We will resume the services that you can have using the Family Office. The core activity is Investments & Portfolio advice. It includes a wide range of services: investment advice in financial instruments, portfolio analytics, simulation, modelling and benchmarking, portfolio performance measurement, macroeconomic and market review and outlook, prepare orders and allocation schemes. So, you can have a global view of your portfolio.
The other main activity is Risk Management. We take a consolidated approach to risk management which includes risk mitigation, cost reduction and value creation, as critical considerations in keeping your family and your wealth protected. Always taking into consideration your risk profile and financial goals, the aim is to turn risk into results. You decide the level of risk.
Life Management & Budgeting is the analysis of your financial situation, considering your goals and risk tolerance, wealth reviews, short and medium-term liquidity requirements and long-term objectives.
Finally, also within the main activities, the Multigenerational Management. We know how important it is to transfer wealth to future generations, so we assist you in preparing an investment strategy to ensure a smooth succession to your heirs, giving due attention to the financial security of your family members. If you think about the future well-being of your family and your descendants, this is a mandatory consultation. It is worth being surprised not to be surprised.
“You’ll Never Walk Alone”
As always, we never put anything above health. But as there has been a significant leap in digitisation and work relations (with more means for the home office), we believe that, in the current financial and economic context, we should make a leap in Financial Education and Financial Literacy in general. If necessary, do not hesitate to ask for help. Don’t take this “investment train” alone. Together with an expert by your side is the fastest way to progress your investments. Therefore, we insist on the “You will never walk alone” formula. Yes, the music composed by Richard Rodgers and written by Oscar Hammerstein II in 1945 for the Broadway musical “Carousel” and later picked up by Gerry and The Pacemakers in 1963, the version which has been adopted as an anthem by Liverpool FC fans.
To make changes is challenging for everyone
This request to change investors’ habits is valid for everyone: Governments, Legislators and finance sector (banks, brokers, wealth managers, financial consultants, colleges and universities of Economics, management), basic school systems, families and, above all, every company should take steps to enhance people’s financial literacy for everybody’s prosperity and well-being.
Euroconsumers Invest believes that directors and entrepreneurs should have a new role for a shift in the financial literacy paradigm. We can’t keep making plans of intentions to see the impact in 50 years. The business needs to act now and contribute to the world’s Financial Education urgently.
On October 5th, the International Day of Financial Education was celebrated. Several initiatives have been put in place, but how many consumers and investors have seen this day celebrations? Were you aware of it? How many European or worldwide schools have implemented a new financial literacy approach in their school programs?
On October 31st the World Savings Day is celebrated, as it goes on for many years. What was the real progress since then? You might say there has been some work done in that field, and we reassert that, but it is insufficient. As long we merely invest in highlighting this or that particular day of finance, it means that we are far from having finished our journey.
Euroconsumers Invest strengthens we must all take a step to overcome this “stormy” 2020 year and its unpredictable impacts that are coming in the following years. Let’s make an effort to change the investing paradigm, to obtain the best results possible, knowing that you will never be alone on this path to shared prosperity and well-being. Implementing Financial Literacy must be mandatory in all subjects of education.
Don’t hesitate to share your resource-raising strategy with your co-workers. Recommend Euroconsumers Invest in your company’s HR Department. Ask them to contact us and learn more about our counselling services.
Read why Health is important for your investments.
Texts for investors and for entrepreneurs and directors interested in providing support in Financial Consulting to their employees. Contact us!