Do you want to invest? When should you seek a financial advisor?

In Mexico, many people have some “little storage” of money at home or in the bank account, the profits of the company, the resources of an inheritance, other sources of income, but they do not invest it because they do not know where, how to do it or not. they trust someone else to do it. It is estimated that in the country only 2% of the adult population has an investment account and of these 67% have their money in low-risk instruments, that is, that generate conservative profits.

Would you let a person help you invest your money? A financial advisor is a certified professional who is dedicated to helping people manage their resources in more advanced financial instruments, with more exposure. What are you doing? Explains, guides, creates a financial strategy for those who want to invest their money in specialized instruments and helps them diversify their investments to obtain better returns.

According to the study “Boosting Mexicans through financial advice”, by GBM and EY-Parthenon, the three reasons why people do not seek or hire a financial advisor is because they believe they have sufficient knowledge to invest on their own, they do not trust that the advisor will manage their finances well and they are distrustful of the lack of clarity in the commissions charged.

Mexico currently faces a gap in the participation of the population in investments and this has a direct effect on the loss of the value of your money, especially in these times of high inflation.

According to the study by GBM and EY-Parthenon, the lack of financial education in the population, the preference for investing in real estate or their own businesses, and risk aversion have led to few Mexicans participating in investments, wearing down or limiting the potential to achieve their long-term goals.

The few people who invest in the country do so in basic products. 67% have their money in low-risk instruments, which causes them to have low returns. The rest have their money in equities.

“Of the few Mexicans who are willing to invest, most are risk averse, preferring debt instruments over variable income. Although variable income instruments are gaining ground with an annual growth of 9% in the last six years, the preference for low-risk alternatives continues to predominate”, says the study.

This reflects the lack of professionals who advise people to plan their investments based on a diversification in instruments that help generate better profits.

There are two types of financial advisors

It is believed that a financial advisor only collaborates with people who have a lot of money, however, you can look for someone who can help you with an investment strategy even if you do not have millions of pesos.

There are two types of financial advisors in the country, those that are linked to an institution and those that are independent.

The financial advisor linked to an institution, normally works for a financial institution, are people with a base salary and variable compensation based on goals and indicators that must be met. This type of advice charges clients through commissions for investment products.

For their part, independent investment advisers are free to operate with any institution, be it a brokerage house, fund manager or bank, they normally charge commissions as a percentage of the assets they manage and, although the percentage may vary among advisers, the most common is 1 percent.

There are currently around 7,500 financial advisors in Mexico, of which 135 operate independently.

According to the GBM study, the main reasons for working with a financial advisor are: superior performance or returns, tax planning or management advice, attention, as well as service and convenience.

“In general, investors who have an adviser offer quality services, provide valuable information, convey security and trust, and understand their needs and objectives,” the document says.

Regarding this, Édgar Arenas, financial advisor and author of the book Investing and Understanding, stressed that when speaking with an investment advisor, it is necessary to check that he is certified, review the experience he has, the results he has obtained in his work.

The specialist stressed that the first thing a financial advisor should do is to help you first determine your investor profile (conservative, moderate or aggressive) and based on this, once you know the personal risk framework, structure an investment portfolio.

Based on this information, you must generate an investment thesis, which is the construction of a portfolio justifying each part, what follows is to define the entity through which it will be invested, because the amounts vary from one to the other. For example, there are some entities where this type of investment can only be made from 100,000 pesos; 500,000 pesos; 1 million and there are some with an initial opening of 5 million pesos.

yuridia.torres@eleconomista.mx