Financial advisors

Financial advisors are paid for their services in one of the following three ways. It is important to understand ahead of time how an advisor is paid. 

When you decide to engage the services of a financial advisor, start by checking with others for recommendations. Then, schedule meetings with two or three to see which one best fits your needs. Here are some questions to ask on your first visit. 

Choose a qualified, experienced professional as your financial advisor if you plan to manage your own assets. Otherwise, select a professional money manager. 

Structuring due diligence into different phases will be useful. They might include initial due diligence, which establishes the key issues for the transaction. Incidental, trivial or standard issues can be left as they can be checked in detail later and only when the parties have committed to the transaction. This spares the costs of engaging external counsel or financial advisors for opinions and validations until it is sure that the investment in their time will be worthwhile. It is therefore useful on each occasion to decide what are likely to be the critical issues for the specific transaction and to ensure that these are dealt with early in the process. 

Mantello is the financial advisor and investment banker for the House of Savoy, the pretenders to the nonexistent throne of unified Italy and the black nobility sponsors of Mussolini. (41)... 

Meet with a financial advisor. Have a yard sale. Make important purchases. And if you re involved with construction in any way, get to work. 

BL is a 71-year-old financial advisor on vacation at the Gulf Coast with his wife of 47... 

Stock options are still sometimes offered as well, although they re not as prevalent as they used to be. This is because such grants must, by US law, now be treated as a company expense, whereas up until a few years ago they weren t. The financial possibilities and implications of stock options lie far beyond the scope of this book. You may need to talk to a financial advisor or tax accountant about this. Stock options can be worth a lot of money—or not. Poor decisions about stock options can cost you money, so it s best to seek advice from the professionals. Still, an offer including stock options can definitely be advantageous. Be leery when they re offered in lieu of a higher salary, though. They won t necessarily be worth anything. 

In this chapter we present a discussion on convertible bonds, which have become popular hybrid financial instruments. Convertible bonds are financial instmments that give the bondholders the right, without imposing an obligation, to convert the bond into underlying security, usually common stocks, under conditions illustrate in the indenture at the time of issue. The hybrid characteristic defines the traditional valuation approach as the sum of two components the option-free bond and an embedded option (call option). The option element makes the valuation not easy, above all in pricing term sheets with specific contract clauses as the inclusion of soft calls, put options and reset features. The chapter shows practical examples of valuation in which financial advisors and investment banks adopts in different contexts. 

The web is not used only to reach customers, it is also a valuable tool for the support of financial advisors. These are the internal clients of a financial service provider. Web-based services support the financial advisors so they can better serve their clients. This leads not only to customer loyalty towards the advisor, but also creates disincentives for advisors in switching firms (Roth and Jackson 1995). In addition, web-based services provide an alternative channel of communication between the firm and the customer, so that the customer-firm relationship is not under a monopoly control by the network of financial advisors. 

The system resulting from the combination of technology and business plans adds value at two levels. At a basic level it supports the provision of personal asset allocation advise to consumers. At an advanced level it supports the complex needs of financial advisors in serving their clients, designing customized portfolios, and dealing with the product originators. Depending on the business plan of each client institution the system would add value at either one, or at both levels. 

The fourth user is a private Bank serving the needs of a small client base of high net-wealth individuals. The system is used for advanced support to financial advisors thus enhancing their access to product originators. For their sophisticated client base it is important that financial advisors have advanced support to design custom-made products as the client needs evolve and market conditions change. The system also enhances the quality of the working environment for the financial advisors and enhances the already excellent retention rates that this institution enjoys, and its clients expect. 

Snelbecker, G. E., Roszkowski, M. J., Cutler, N. E. (1990). Investors risk tolerance and return aspirations, and financial advisors interpretations A conceptual model and exploratory data. Journal of Behavioral Economics, 19, 377-393. 

Patrick Y. Shim, Financial Advisor CG Investment Group Wells Fargo Advisors LLC... 

Knowledge about bonds can add value to an investor s portfolio, as classic allocation models suggest that nearly everyone needs at least some fixed-income exposure." According to Den-zler, "Investors can clearly better their financial positions by learning more about bonds, whether they access the abundance of resources offered by financial service companies via the Internet or by consulting a financial advisor."... 

For one thing, investors whose portfolios are heavily tilted toward stocks can lower their overall risk over time by permanently including a bond component. Financial advisors say far too many investors blinded by the returns of stocks have ignored the usefulness of bonds as a risk-reducing component of their portfolios in recent years. 

You have to ask if the bond is being recommended on its own merits or because the brokerage house owns it," advises Richard Lehmann, president of the Bond Investors Association, a financial advisor and newsletter publisher in Miami Lakes, Florida. Ask your broker if there are any incentives tied to his recommendations. "If they lie, it s fraud," says Steve Wallman, a senior fellow at the Brookings Institute and a former SEC commissioner. 

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