Be yourself; Everyone else is already taken.
— Oscar Wilde.
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How Advisors Differ From Brokers
Prospective investors may want to know how investment advisers differ from brokers. At first glance, these jobs may seem identical, but there are important differences. The following details may help readers understand whether they need to consult with an investment adviser or a broker:
1. Investing and the Need for a Broker
Prior to the invention of the World Wide Web, brokers were financial professionals catering to wealthy investors. At that time, people did not yet have personal computers or cell phones and could only place orders via a licensed stockbroker. These investment orders typically occurred via phone calls, and clients paid high commissions when they bought or sold equities and bonds. Today, people can take advantage of online trading via discount brokerage firms without the services of an intermediary. Wealth management options still exist for investors requiring personalized services.
2. Investors with Wealth Management Needs
Investment advisers charge fees for helping clients manage their accounts. An investment adviser may also help clients with their tax obligations, estates and mortgage plans. Unlike financial advisers, investment advisers must register with the Securities and Exchange Commission (SEC) if they manage $110 million in assets under management (AUM) per client. A wealth manager or asset manager is synonymous with an investment adviser.
3. Different Training Requirements
An investment adviser needs to pass the Series 65 exam before they are permitted to charge fees for their services. A broker must pass the General Securities Representative Exam (Series 7). Brokers aspiring to attain higher levels can take additional securities exams.
4. Regulatory Differences Between Investment Advisers and Brokers
Investment advisers have specific fiduciary duties to their clients and must abide by the Investment Advisers Act of 1940. These duties, which are included in the Advisers Act Sections 206 (1) and (2), prohibit investment advisers from using schemes intended to cheat clients. An investment adviser bound by fiduciary duties must disclose all the investment facts to their clients. Plus, an investment adviser is not permitted to place their interests above those of their clients. Brokers are not bound by fiduciary duties but need to register with the Securities and Exchange Commission (SEC) and a broker self-regulatory organization. Some brokers are also registered as investment advisers.
The Top Stock Pitfalls to Avoid in 2020
2020 promises a new year of profits as the stock market still outperforms the U.S. dollar on a yearly basis. Aside from some market pitfalls that you should avoid, the new year will give us endless opportunities to profit from. Leading banks and top agencies are cautioning the markets, however. These financiers want investors, like you, to be aware of the common traps in stock trading. Here’s a better look at the pitfalls that you must avoid in the financial market:
Leaving Your Money in the Bank too Long
Many investors make the mistake of lacking the right proactivity for their money. Research shows that we tend to hold money too long—to our own hurt. You can’t profit from 2020’s rallies if your money sits in a savings account. Sure there are millions of reasons why you might shy away from investing. Though market conditions aren’t always favorable, perfect markets are only profitable when you invest into them beforehand.
Putting all of Your Hopes into a Single Asset
The second, hidden pitfall appears when putting your entire fund into a single bet. Let’s just assume that you’ve done your research on a stock and have confidence in it. Now imagine the stock performing well—with a healthy profit margin. It only takes a day for things to go sour and for your emotions to bring down your balance. Putting all of your money into one trade gets you so worked up that you’ll make bad decisions.
Trading Without Flexibility in Your Approach
The third mistake of stock investors is encountered when they lack flexibility. Yes, your trading method should work around routine parameters, but these strategies need to account for ALL market conditions. Some traders fail to adjust their approach as the market changes; this is harmful to their emotions and their personal finances.
Failing to Track Your Balance or Administer Real Accounting
Our last trap is an unbalanced-balance sheet. This happens when you have a portfolio of multiple assets to track. Rebalancing a fund can only happen when you know the gains and losses from all of your stocks. If, for example, you gain 20 percent from one asset but loss 27.6 percent in another, then you now have a total loss of 7.6 percent. Don’t let one success alter the real numbers behind your trades.
The Most Important Priorities of a Leader
Much of a business’s running is dependent on proper leadership. Certain priorities of a leader pertain to proper functioning of a business, establishing employee safety, getting rid of toxic workers, and more. Throughout many years, worker satisfaction has seem to fall through the cracks in many businesses. The priority has been mostly centered around work completion, sales, and business reputation. However, other things can prove to be important if not more important. With new challenges, leaders must adapt to find new solutions. Perhaps the priorities of the company should change or leaders should spend their efforts looking at the other ways they can get better results.
Time Management
Timing is essential and very important especially when working on projects in a group. People are depending on each other to do their specific job. So, if someone doesn’t meet a deadline or missing an appointment, this can prove to be very detrimental to work. Leaders should enforce a strict no tolerance rule for time management. They should also lead by example and make sure they are showing up early, issuing notices on time, and answering employees’ questions diligently.
Self-improvement
A priority any one can benefit from is improving on themselves. Just because a leader is an overseer, that doesn’t mean they know the ins and outs of each job. If a leader is supervising a team, colleagues likely have their own field of specialty. Leaders should prioritize learning from their colleagues so they can have greater appreciation and understanding of each person’s contribution.
The Value of Sacrifice
“Leadership is a service. Service comes with sacrifice. No sacrifice, no service, no leader.” – Simon Sinek
“Effective leaders sacrifice much that is good in order to dedicate themselves to what is best.” – John C. Maxwell
Everyone has their family and home life. Some have more household and family responsibilities than others. Leaders prioritize their job duties. Employees have families at home too. However, it is understood that there is a time and place for family and work unless it is an emergency. Imagine how it would feel as an employee pulling a double shift while their boss or supervisor goes on an impromptu family vacation. This leaves a bad impression on a team as it indirectly shows that a leader doesn’t think of themselves as equal to the team.
Address Mental Health in the Workplace
Mental health is very crucial not just for the functioning of a business but the functioning of a human being. Employees are not robots that will always meet job demands. There could be things going on a worker’s personal life. Sometimes work conditions aren’t healthy enough for an employee’s mental health. Businesses often think of unsafe work conditions as physical safety hazards. However, there are toxic work conditions that harbor gossip, bullying, unfair treatment, etc. All of this can negatively affect an employee’s mental health. Aside from the general work atmosphere, leaders should make it priority to do consistent mental health check ins and de-stigmatize mental health in the workplace.
John Fabiano 