An advisor will recommend a fund to you most of the time and will show you its annual returns. Sectoral funds are the majority of the top ranking funds and they bear a certain amount of risk. Usually, sector funds are a fund with a large allocation to particular sectors that are high-risk funds. The fund houses have fallen victim to herd mentality several times in order to raise huge funds from the market and launched similar offerings in fast succession. The banks and investment advisors have played their part by indiscreetly promoting these items because they get better commission. Think again before you take suggestion from such advisors. Click on Hawley Advisors

Through the mutual fund New Fund Bid, investment advisors have received well by convincing investors that investing during the NFO stage is cheaper. This is not the facts, but be careful. By pitching the mutual fund NFOs as stock IPOs, distributors often take advantage of the lack of awareness on the part of investors, distributors have only discredited themselves by not being true to their investors. A new fund can only be recommended by a consultant if it adds value to the portfolio of the investor or is a special investment proposition. Any advisor who is true to the profession would pitch for an established scheme which has a strong track record and tested rather than a similar scheme in its IPO stage.

The primary role of the investment advisor involves designing a portfolio for the investor based on its needs, risk profile and effective management. While it is important to maintain high service quality, it should not take precedence over the advice section. Most of the advisors I’ve seen usually work for major distributors, such as banks and large brokerage houses. Instead of delivering a value base consulting service, the key task for them is to fulfil the objectives. Independent individual investment advisors tend to minimise their job by just showing them themselves when they had to gather the type.