Reviewed by Aug 27, 2020| Updated on
An advisor fee is an amount paid as consulting charges for advisory services in matters connected with financial services, money management and other investment advisory services. The fee for consulting may be based on an hourly rate or can be a percentage of the assets managed, which is a commission income.
Understanding Advisor Fee
- A financial advisor or an investment advisor may provide a wide range of services. The services for individual clients can be related to personal finance matters such as setting up an investment portfolio. For corporate clients or large investment firms, advisory services can include underwriting for the issue of instruments for raising capital.
- The role of an investment advisor or financial advisory is a continuous one which requires continuous monitoring of investments under the portfolio or the assets managed. The portfolio of assets may need a rejig or reshuffling due to a change in economic circumstances or for change in the financial conditions of the client.
- The advisor fee payment is for managing the assets professionally. An investment advisor or financial advisor is typically a person holding a degree in finance and with a certification from a professional body. The role of the advisor is bound by the rules and regulations of the professional body. Hence, the advice should be after considering the facts of the case and technical evaluation.
- In the case of corporates seeking to raise funds by way of a long-term debt issue or fresh equity or rights issue, they may seek the advice of a finance expert on the pricing, interest rate and tenure of the instruments. Also, in the case of an initial public offering by private companies and follow on public offers, the corporate may seek advice from a finance expert.
Technology has revolutionalised the method of financial advisory. The financial data is forever changing and an advisor needs to be up to date with the latest developments in the world economy as well as local economies. The advice should be futuristic in nature and should be able to evaluate data technically and in an objective manner.
- Turnkey Asset Management Program – TAMP
- Chartered Advisor for Senior Living (CASL)
- Investment Policy Statement (IPS)
- Certified Consumer Debt Specialist (CCDS)
- Currency Strategist
- Investment Advisor
- Investment Advisory Representative (IAR)
- Professional Risk Manager (PRM)
- Registered Investment Advisor (RIA)