Investment advisors - do we need them? E-Book

Robert Schmidt

• Herausgeber: novum publishing
• Kategorie: Gesellschafts- und Liebesromane
• Sprache: Englisch

Seitenzahl: 60

Veröffentlichungsjahr: 2025

Beschreibung

Illustrious players cavort in the shark tank of investment advice. Are the different wishes and objectives of advisors, financial service providers, the state and clients compatible at all? And what exactly is investment advice? And which financial products suit whom? At the end of this approach to a taboo subject, a great deal of light is shed on the world of private finance, which is often surrounded by shadows. Many questions (including the title of the book) are answered. And - very importantly - the reader comes to an increasingly surprising realization ...

Leseprobe

Clarification right at the beginning

Let me say this right away without any culpable hesitation: I am not claiming to be right about the following content. I don't even know whether I'll still be of the same opinion in a few months' time. Or whether I am presenting everything 100% correctly from a legal perspective. Nothing here is rigid. Nothing here is comprehensive. I'm only concerned here with things that seem important from my point of view. That is all. Exotic or highly speculative financial products have no place here. But that's not the point anyway. It's never about a single product. The big picture has to fit. In investment advice, the proposed products must dovetail and complement each other. Only then can positive success be achieved. And that is what I expect from a service of this kind.

Introduction

Who doesn't know it? Or who doesn't know someone to whom it has happened? Or who doesn't know someone who knows someone to whom it has happened? But no, we don't want to trivialize it. Otherwise this book would be completely superfluous. Which, of course, it is not. We are talking about so-called advice in the area of personal finances that did not lead to the intended success. Is it the life insurance policy that pays out a far lower amount on maturity than the projections made at the beginning of the book suggested? Or is it the share that - once highly recommended - turned out to be a complete flop over time? Or even the real estate fund that - touted as concrete gold in the advisory service - didn't really take off at first and ended up causing massive losses? There are many more examples. But I think you know what I mean. In recent years, all of this has led to growing dissatisfaction with the service provided by "investment advice". Which raises the question: do we need investment advisors at all? I'll give you the answer up front: Yes and no! Why is that so? You'll see ...

"I have been rich and I have been poor: Rich is better."

(Sophie Tucker)

Investment advice

Let's approach the topic with a basic consideration of what the term "investment advice" actually means. To do this, let's break down this compound noun into its two components - and define them. Simply to see what we are talking about here.

Wealth - what is it?

Possible definition:Wealth generally refers to the total value of the possessions that a person, company or organization has It includes all tangible and intangible assets, such as cash, real estate, vehicles, stocks, bonds, intellectual property and other assets. Net worth is what's left over when you subtract all debts and liabilities. It is a way of measuring the financial worth of an individual or entity and can serve as a measure of wealth or financial stability.

Important: It is importantto note that wealth does not only include material possessions, but also the ability to generate income and provide financial security. It can change over time, depending on various factors such as income, expenses, investments and debts. Hmmm - so it's not just about increasing possessions, but also the broad area of security. Interesting, isn't it?

Advice - what is it?

Possible definition:Counseling is a process in which a person or a group of experts use their knowledge and experience to help others solve problems, achieve goals or improve their skills. It is an informal or formal exchange of advice, information and recommendations to help the person seeking advice to make decisions. Counseling can take place in a variety of areas, such as career development, psychological support, business management, healthcare and many others - including personal financial planning. The advisor listens carefully, asks questions, analyzes the situation and then offers customized solutions or strategies.

Important:The purpose of counseling is to help the advice seeker gain clarity, make better decisions, overcome problems, develop skills or take advantage of opportunities. It is important to note that the counselor is not making decisions for the client, but helping them to make informed decisions and find the best solutions for their specific needs. If that were the case, then let's project that onto awealth advisoryservice and ask the following question: If I, as a wealth advisor, know that the best solution for my client's current concerns is a competitor's product, but I conceal this from him and instead offer himmyproduct, which is at most the second-best solution here, is this stilladvice?

How Germans invest their assets

Germans invest their assets in various ways, depending on their individual goals, risk appetite and financial means. Often, however, the investments chosen in this country tend to be conservative in nature. Although asset growth is desired, the associated risk should be avoided. This is where the frequently quoted cat bites its tail. And this has far-reaching consequences. The desire for fluctuation-free products means that a modest amount of so-called venture capital tends to be made available in Germany. This makes it more difficult for budding entrepreneurs to finance their projects and bring innovative products or services to market maturity. And so it is also logical that most of the population's money is held by a few so-called collection agencies.

Important:Note that these are just a few examples and that individual investment decisions can vary greatly. Some people combine different types of investments to diversify their assets and spread risk. It is recommended to seek advice from financial experts when investing assets to take into account individual goals and risk tolerances. Really? Yes, but only if it is realadvice. But what is actually meant bycollection agencies?

"Finance is the art of of passing money from hand to hand, until it finally disappears."

(Robert W. Sarnoff)

Large capital collection centers in Germany

In other words, which institutions do German citizens entrust their money to? The largest capital collection centers in Germany are generally large financial institutions, insurance companies, pension funds and investment companies. Here are some of the most important capital collection centers in Germany:

Banks:Banks play a central role in raising capital. Large German banks such as Deutsche Bank, Commerzbank and KfW Bankengruppe raise capital from private customers, companies and institutional investors.

Insurance companies:Insurance companies such as Allianz, Munich Re, Generali and Axa collect substantial amounts of capital from their customers through insurance premiums. This capital is then invested in various asset classes such as shares, bonds and real estate.

Pension funds:Pension funds are institutions that manage money for the retirement provision of employees. Examples of large pension funds in Germany are the Bayerische Versorgungskammer (BVK), the VBL (Versorgungsanstalt des Bundes und der Länder) and the Rundfunkversorgung.

Investment companies:Investment companies collect capital from investors and invest it in various investment products such as investment funds, ETFs (exchange-traded funds) and other financial instruments. Major investment companies in Germany include DWS, Union Investment, BlackRock and Fidelity.

Investment companies and asset managers: