2/24/2022 - Economy and Finance

Learning from Neffa: Why is a financial advisor required?

By gustavo neffa

Learning from Neffa: Why is a financial advisor required?

When the throat hurts, we go to the doctor. When we need to close the tax return on personal goods or profits, most people resort to an accountant. When we need to evacuate many existential doubts we go to the psychologist. We always resort to someone who knows more or who we think can solve the problem, such as any problem that one can have inside a house on plomeria or electricity themes, by just mentioning some professionals we spell to resort.

There are other tasks with intermediaries that are a “necessary evil”, such as when it is required to demand someone and hire a lawyer, because their registered membership is a requirement. Like when a house is written, you have to pay when writing.

But I ask you: when we need to manage our investments, why don't we have time or knowledge necessary, are we going to reach a financial advisor? It is a simple question, but on which many investors do not feel safe about the answer. Welcome to this new delivery of the "Learn to Invertir" segment, where we will discuss some aspects required to take into account the time to manage our investments.

After giving “The first steps of the investor" It is necessary to think whether or not we lack a financial advisor, because we will think that we can do it alone. But this person will not give several benefits:

  1. It is more professional in the management of investments by having studied for it or getting to know more instruments.
  2. Reverse 100% of your time to analyze markets and look at graphics.
  3. You have access to data terminals and more reports.
  4. It applies as a basic rule a proper diversification of risks.
  5. Advisor on the best investment alternatives depending on our investor profile (risk/return ratio).
  6. Draw a minimum tax guide.
  7. Performs protection strategies with options.
  8. You can open an account in a place you do not directly access.
Technology could solve it, as in many other cases of everyday life. There are the “robo-asesores”, systems that operate almost automatically, Can you give us the day tomorrow of an advisor? My answer is: No! There would be no meat and bone pilots on the planes. The real pilots are trained to cross storms in which often the best decision is made at the fair time and based on the experience acquired or the best alternative existing at that time. All this can hardly be replaced by an algorithm. Without going further, often, in situations these algorithms fail. In finance we call it flash crashes.

How much help you need in managing your investments will depend on several factors. First, it will depend on personal financial circumstances. It is not the same person without large accumulated resources or that of an asalted working person who rents his house and who does not have such saving capacity.

It is also the other extreme, which have been conducting monetary actions with several companies and multiple additional business sources, real estate properties, which has lawyers and accountants for their daily business and has solved not only the problem of succession to their children through an irrevocable trust, but also of their mandatory and/or voluntary individual capitalization fund, or of their financial investments already structured in advance with numerous investment portfolios in different brokers or banks. In these specific cases it is easier to outsource financial investments.

Most Argentines find themselves in the first descriptive cases, i.e. have some physical assets and accumulated monetary resources to protect and/or savings to invest.

In the latter case, the person must ask and answer on what are the Long-term financial objectives and the investment horizon. It is not the same to invest to buy the house, pay the education of your children, invest in life insurance to earn long-term inflation or save for our children's inheritance. Pending to buy a house, pay for the university or a retirement are simple and concrete investment goals. Others are not so much, for example earning inflation or the best combination of currencies.

And that's why When we resolve these issues, you will only be prepared to invest in the capital markets.

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gustavo neffa

gustavo neffa

I'm Gustavo Neffa. Director of Economics and Finance at FinGurú. Partner and director of Research for Traders, leading a team of market analysts. I spent the last 24 years in the financial sector in both domestic and foreign entities, having occupied the post of Senior Research Analyst in Macrosecurities of the Banco Macro and the BBVA Banco Francés, as well as economic analysts with the economist in chief of the BBVA Banco Francés. I am also a professor in Corporate Finance, Investment Portfolio Management, Financial Asset Valuation, Valuation of International Investment and Finance Projects in various MBAs and postgraduate courses in Buenos Aires and in the interior of the country and professor of the MBA of the UNLP and the UNNE of Financial Asset Assessment and the postgraduate degree in the UBA Capital Market in agreement with ByMA. Co-director of the UNLP Advanced Finance Programme.


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