What to know what makes us different from

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Last updated: May 20, 2019

What is your competitive advantage as an investment advisor?Rebecca Fender, CFAAs investment professionals, we spend a great deal of time perfecting our analytical skills, keeping up to date with the latest events in the market. Another role that some of us play is as communicators, finally explaining to potential clients the advantages of our advisory services. This field is very competitive, so customers need to know what makes us different from the thousands of investment consulting firms.The selection process for an investment manager often ends in something similar to “a beauty contest,” where after requesting an investment proposal, only a small group of firms are invited to attract decision-makers. Some factors are raised (and tailor-made adaptations are made) for a particular audience, but despite being well prepared, often the suspicion is that in the end, the committee will just choose those that perform best over a period.

1 to 3 years.When we asked our CFA Institute Financial NewsBrief readers what they emphasize when searching for new clients, only 19 percent of the 484 participants said that performance is what guides them. Perhaps this is because the uncertainty of the markets means that the promise of consistently high returns is a sure way to motivate customer turnover.On the other hand, what generates loyalty to the ups and downs of the market? The most significant number of responses (35 percent) recognized that their investment philosophy differentiates them.

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With this comes his passion for investing and conviction in his investment process. These are the characteristics that the “big investments” have in common. My colleague Jason Voss, CFA, often points out that the search for alpha means by definition that you must do things differently than the competition. Therefore a good investment philosophy, consistently respected for many years will stand out.The second most popular response, at 27 percent, is an experience. Having seen how the markets react and what they learned on the road is what gives the advantage – this is something that can not be copied.

Wisdom cannot be taught, and while some employers point out that knowledge of financial history should guide new graduates in the profession, we all know that reading a book is not a substitute for having lived the experience. A solid academic background, together with an ethical commitment, are elements that generate confidence in an interview with a client. However, only 3 percent of respondents indicated that education is the most prominent aspect and only 8 percent led the ethics when dealing with potential clients. This result is impressive because, according to the Investor Confidence Study Edelman / CFA Institute 2013, only 53 percent of investors in the United States, the United Kingdom, Hong Kong, Canada and Australia, trust that finance firms do what is correct In fact, investors reported that the only and most important factor to consider when choosing an investment manager is to imagine that they will act in the best interest of the client.So, do we know what customers are looking for? That is perhaps the tremendous competitive advantage that any investment professional can have. CFA Institute, together with Edelman again, conducts a study based on investor preferences, asking independent and institutional clients what is important to them. The updated results will be shown in the coming months. CFA Society of Mexico translated this text.

In case of discrepancy with the original version, the English translation should be considered as the official version.

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