Investor tips: How to recognize a good fund consultant

Investor tips: How to recognize a good fund consultant

Should I actually put my money into an investment fund? And, if so, which one? For private investors, the final decision depends considerably on how much confidence they have in their fund consultant. Assessing the quality of a fund consultant is difficult for a non-professional. According to TÜV SÜD Academy, however, there are some criteria that can be checked by anybody during a consultation. TÜV SÜD has been organizing examinations for certified fund specialists since 2006, and has compiled 10 key tips for consumers.

1. Is the fund consultant interested in the investor's previous knowledge? Consultants should ask investors whether they have any previous experience and knowledge of funds and other forms of investment, and adjust their approach accordingly.

2. What qualifications does the fund consultant offer? In Germany, fund consultants still do not need special professional qualifications – anybody can call themselves a fund consultant. Given this, consumers are advised to ask about the consultant's qualifications and general and advanced training. They should also inquire about professional experience and check whether the consultant's fund expertise is still up-to-date.

3. Is the fund consultant able to furnish proof of his/her qualifications? An independent third-party certificate proving the qualifications of the financial expert offers valuable guidance to consumers. A training programme offered by the Munich-based FINTAC® company, for example, paves the way to becoming a TÜV SÜD-certified fund specialist.

4. Does the consultant clarify the investor's individual investment strategy and specify the risks involved? Which fund is right for which investor depends, among other factors, on whether the investor is more of a speculator or prefers secure investments. Of course, it also depends on the timeframe of the investment. In simple terms: people entering long-term investments may benefit from riskier schemes, as the ever-present possibility of interim losses is less critical. Of course, consultants must frankly and honestly point out the risks involved.

5. Does the financial specialist inquire about the investor's investment goals? Is the investment to serve as a retirement plan, for a property purchase or to take advantage of tax breaks? To provide optimum consulting, the financial expert must address this question in detail.

6. What assets does the investor have? To orient planning to the client's needs, consultants need to consider their investors' liquid assets, their monthly net household incomes, but also any investments held with other financial services providers.

7. Does the future investor receive all the information needed? From the fund name to the investment company behind the fund, the domicile of the fund and the fund currency: another important criterion is whether a consultant has all the details at the ready and describes them clearly.

8. Are all costs fully explained? Issue premium, management fees and other costs: a good fund consultant points out all the costs involved.

9. Are references available? Recommendations by family and friends who fared well with a fund consultant may be a decisive factor in making a personal selection.

10. Is the financial expert easy to deal with? Precisely because investment also involves trust, investors should feel perfectly at ease when talking to a fund consultant.

Personnel certification by TÜV SÜD Academy offers helpful guidance when looking for a fund consultant. A training programme offered by the Munich-based FINTAC® company paves the way to becoming a TÜV SÜD-certified fund specialist. The training addresses theoretical and practical issues in every aspect of investment funds, in alternating phases of self-study and classroom tuition. Periodic re-certification every three years ensures that TÜV SÜD-certified fund specialists stay abreast of developments in their sector. "TÜV SÜD certification offers consumers guidance in the complex financial services market. Consumers can thus rest assured that consultants have up-to-date and comprehensive expertise, and thus gain genuine value-added", says Stefanie Pfeifer, TÜV SÜD Academy.

TÜV SÜD addresses the subject of financial services quality in depth in many areas -- TÜV SÜD Management Services, for example, offers certification of fund selection processes to financial services providers. TÜV SÜD Academy is a long-standing training and education partner of industry, trade, commerce and private individuals.

Further information is available from Stefanie Pfeifer, TÜV SÜD Akademie GmbH, Tel. +49-89 / 57 91 – 34 64.

Editor: Mareike Lehnhardt