With interest rates currently so low, the question of other investment opportunities inevitably arises. If you have no interest in delving into these issues yourself, looking for an investment advisor is an obvious step. Under what circumstances does this make sense, and how do I find a good advisor?
The first steps without an advisor
With a few thousand euros, it is difficult to justify the costs of an advisor. There is no such thing as good advice for free; the costs are at best hidden.
Even at this stage, you can take the first steps toward sensible investing that will still be beneficial later on. These consist of getting to know the subject matter and your own reactions to price gains and losses. Everyone should know the elements of investing. For starters, it is enough to select a few funds, pay attention to low fees, and manage your own portfolio with little effort.
Once the capital has grown sufficiently through building a reserve and hopefully through investment returns, you can look for an investment advisor on platforms like trustlocal.de.
When does an advisor make sense?
They should be hired if they are worth their cost to the client.
One criterion is the assets to be managed. In the four-digit range, a few funds that you place in an online broker's account with a basic understanding will suffice.
Another point is your personal situation. The idea of building a reserve often arises in connection with investing for a young family. In that case, the needs of the children must be taken into account just as much as, for example, the acquisition of housing and the parents' retirement provision.
How do I find a good advisor?
Criteria such as economic understanding and a customer-friendly approach naturally play a role; furthermore, an advisor must act solely in the interest of their client.
This may seem obvious, but it is not. Many investment advisors are subject to a conflict of interest. They receive a commission for selling certain investment products and securities, which means that such a sale is in their own interest. This definitely applies to advisors employed by banks, but it also applies to freelance investment advisors who are paid on a commission basis. They offer their clients supposedly free advice, but these costs are just well hidden.
As a client, you want an advisor who only recommends steps optimized for your own results. Such a fee-based advisor must be paid for the time spent, but in the long run, you are much better off with this approach.
Conclusion
As soon as there is some capital to invest and your own personal situation is no longer quite simple, hiring an advisor becomes an obvious choice. In case of doubt, it is better to consult one sooner rather than later. The costs of mistakes in the area of investing are usually higher than an advisor's fee.
