Have you ever wondered how the rich get so rich? Have you sat and wondered if there's a secret, and if so, what the secret is? Believe it or not, there is a secret to obtaining wealth, but it most likely is not what you think. People who have accumulated financial wealth have done so with wise investments and the use of private investment counsel. When you hire a highly qualified private investment expert, you are paying people to personally handle your investments, carefully follow your directions and report back on a regular basis. Surprisingly enough, in most cases, the fees for these services are much less than traditional brokerage fees that you may be paying now.
To the dismay of many, general financial advisors get a hidden 'trailer fee' of your portfolio of about 1% annually, on top of the 0.4% commission fee. When the mutual fund companies' own fees are also included, you will pay close to 3% a year. Investment council firms generally charge rates of about 1% to 1.5% of assets per year; more than one percentage point lower than what general financial advisors charge.
Hiring an investment counsel is often considered the next step after you've worked with a broker or financial planner to grow your portfolio to the stated private counsel minimum, which is usually around seven figures. This may sound like a hefty nest egg, but many Canadians reaching their retirement have managed to put a lot of money away. If you have not reached this financial minimum, many firms are willing to take you on for even less than their stated minimums if they see a lot of potential to grow your portfolio.
Private investment counsel firms will assign a highly qualified representative with a chartered financial analyst (CFA) designation, the investment industry's most respected designation for managing money. They will go through a rigorous process to specify your risk tolerance, financial constraints, investment objectives and overall guidelines to managing your money (called an investment policy statement or IPS). They will generally provide a monthly report that will compare the performance of your investments to benchmark indices for the over-all market so that you can clearly see how your investments perform compared to the market as a whole. Private investment firms are not a service that's sold, but rather a service that's bought. The advice you get is informative and balanced, with no soft peddling of market risks.
There are many private investment firms out there to choose from. If you would like to begin investing, but don't have any free cash available, you might want to consider a loan. Like with investment firms, selecting a lender should be researched as should fitting payments into your budget.
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