DIY Investing vs Investment Brokerage Firms vs Financial Advisors

Navigate the pros and cons of DIY investing, brokerage firms, and financial advisors with our comprehensive New Zealand guide to help you make informed financial decisions.

Updated 23 July 2024

Summary:

The pandemic pushed many Kiwis locked down at home to invest their hard-earned savings into different types of investments and undertake Do-It-Yourself (DIY) investing.
DIY investing makes sense when you're investing small amounts of money. However, as you become wealthier, deciding whether to stay DIY investing or working with an investment brokerage firm or seek the help of a financial advisor can significantly affect the amount of wealth you accumulate over the long term.
Additionally, as you learn more about investing, your risk appetite might change, and you might start to consider other investment pathways that better fit your financial situation or could improve your returns.
When it comes to investing, there are three main options available. One option is to do your own DIY investing, where you take responsibility for managing your investments. Another option is to use investment brokerage firms like Forsyth Barr, Craigs Investment Partners, and Jarden to handle investments. Finally, a third option is to use a financial advisor to provide investment guidance and advice.

There's a lot to consider. To help, our guide covers:

Understanding DIY Investing (Using Share and Fund Platforms)

What is DIY Investing?

DIY investing is when individuals manage their investments without the help of a financial advisor or brokerage firm. This situation means that they're responsible for researching and selecting investments, monitoring the performance of their portfolio, and making any necessary adjustments. DIY investing can be done through various methods, including buying and selling shares, managed funds, exchange-traded funds (ETFs), and other securities through an online brokerage account. However, DIY investing is usually done through a low-cost, online share trading platform like Sharesies, Hatch, Tiger Brokers or Stake.

To see a comprehensive breakdown of all the share investing platforms in New Zealand, visit out our guide here.

What do I need to know before I do my own DIY investing?

Before you start investing on your own, it's important to have a clear understanding of your financial goals and risk tolerance. This understanding will help you determine the types of investments right for you and the amount of money you're comfortable investing. It's also essential to understand the financial markets and the types of investments available. This research includes understanding the risks and potential returns of different investments and how they fit into your overall portfolio.

What are the main share trading platforms for DIY investing in New Zealand?

Several share trading platforms are available in New Zealand for individuals to use for DIY investing. Some popular options include:

How much does it cost to do DIY investing in New Zealand?

The cost of DIY investing in New Zealand can vary depending on the platform you use and the investments you make. Most platforms charge a transaction fee for buying and selling securities, which can vary from platform to platform. Some platforms also charge an annual fee or a fee based on the value of your portfolio. However, the cost of DIY investing will generally be extremely low as most investment trading platforms need to stay competitive relative to each other. For more comprehensive pricing information, check out our reviews for each investing platform linked above.
In addition to platform fees, you may incur investment costs, such as management fees for managed funds and ETFs. To compare the various costs associated with every DIY investment platform in New Zealand, check out our breakdown here.

What are the benefits of DIY investing?

There are several benefits to DIY investing, including:

Control: When you invest, you have full control over your portfolio and can make investment decisions.
Cost: DIY investing is almost always more cost-effective than using a brokerage firm or financial advisor, as you’re not paying for their services.
Flexibility: DIY investing allows you to be flexible and make changes to your portfolio as needed.
Education: DIY investing can be a great way to learn about the financial markets and gain a deeper understanding of investing.

What are the drawbacks of DIY investing?

There are several drawbacks to DIY investing, including:

Time: Managing your investments can be time-consuming, especially if you're unfamiliar with the financial markets.
Risk: DIY investing can be risky, especially if you don't have a solid understanding of the financial markets and your investments.
Limited knowledge: If you're unfamiliar with the financial markets and different types of investments, you may not have access to the same knowledge and expertise as a financial advisor or brokerage firm.
Limited investment options: As an individual investor, you may not have access to the same range of investment products as a brokerage firm or financial advisor.

MoneyHub Founder Christopher Walsh shares his comments about DIY investing and how the last few years' behaviours:

In the rush of 2020 and 2021, many people, buoyed by the tales of overnight riches and the democratisation of trading through new apps and platforms such as Sharesies and Hatch (among others), jumped headfirst into DIY investing.

In hindsight, the pitfalls became all too real. Speaking from experience, the journey through those times was a hard lesson in the perils of market volatility and the value of seasoned advice. Many New Zealanders were lured by the call of quick gains, only to be blindsided by the realities of a market that is as unforgiving as it is unpredictable. It was a period marked by a collective euphoria around shares that could do no wrong, cryptocurrencies that seemed to promise a new era of financial freedom and a general sense that the traditional rules of investing no longer applied. Except they did, and a lot of people lost money.

As someone who's navigated the financial markets for years, I felt an unease as I watched this unfold. I've always believed that successful investing is a marathon, not a sprint, requiring a steady hand and a clear head. But the fever of those years was infectious, and even the most rational among us found it hard not to get caught up in the hype. WallStBets was one example, but the IPOs of My Food Bag and All Birds were a disaster for any investor. Investing without a clear strategy, driven by the fear of missing out, is dangerous.

The lesson from this period is clear: investing is not a game. It's a serious endeavour that can shape your financial future. The importance of education, understanding risk tolerance, and having a strategy for more than just the next big thing cannot be overstated. For many, the burns of 2020 and 2021 will serve as a reminder that sometimes, the adage holds: if it seems too good to be true, it probably is.

In reflection, these experiences underscore the value of patience, the virtue of due diligence, and the wisdom of seeking guidance. DIY investing does not guarantee riches; for many, it's a loss-maker".

Christopher Walsh
MoneyHub Founder

When should I consider switching from DIY investing to investment brokerage firms or a financial advisor?

There are several reasons why you may want to consider switching from DIY investing to an investment brokerage firm or financial advisor, including:

Lack of time: If you no longer have the time or energy to manage your investments, it may be worth considering using an investment brokerage firm or financial advisor to help with portfolio management.
Lack of expertise: If you're not confident in your financial knowledge or expertise, it may be worth considering using an investment brokerage firm or financial advisor to help with investment decisions.
Changing financial goals: If your financial goals or risk tolerance have changed, it may be worth considering using an investment brokerage firm or financial advisor to help with portfolio management to ensure that it aligns with your current goals.
Costs: If the fees and costs associated with DIY investing are becoming too burdensome, it may be worth considering using an investment brokerage firm or financial advisor to help with portfolio management and potentially offset the costs of trading complex, expensive derivatives or other financial products.

Understanding Investment Brokerage Firms

What do investment brokerage firms do?

Investment brokerage firms, such as Forsyth Barr, Craigs Investment Partners, and Jarden, provide investment services to clients. These firms offer various services, including portfolio management, financial planning, and investment advice. Investment brokerage firms can access a wide range of investment products and provide personalised recommendations based on a client's financial goals and risk tolerance. They may also have access to investment opportunities that aren’t available to individual (retail) investors.

Who are the top investment brokerage firms in New Zealand?

Forsyth Barr, Craigs Investment Partners, and Jarden are all well-respected investment brokerage firms in New Zealand. Each of these firms has a strong reputation and a long history of providing high-quality investment services to clients.

Forsyth Barr
Forsyth Barr is a full-service brokerage firm with a team of experienced financial advisors. The company offers various services, including portfolio management, financial planning, and investment advice.

Craigs Investment Partners
Craigs Investment Partners is another full-service brokerage firm that offers a range of investment services, including portfolio management, financial planning, and investment research. In addition, the company has a team of experienced financial advisors to help clients make informed investment decisions.

Jarden
Jarden is a leading independent Australasian investment bank that provides various services, including portfolio management, financial planning, and investment advice. The company has a team of experienced financial advisors dedicated to helping clients achieve their financial goals.

How do investment brokerage firms get paid?

Investment brokerage firms typically charge fees for their services, including a percentage of the assets under management, a flat fee, or a combination of both. Therefore, it's important to carefully review the fees and costs associated with using a brokerage firm and understand how they will be paid before deciding.

What are the benefits of investment brokerage firms?

There are several benefits to using investment brokerage firms, such as Jarden, Craigs, and Forsyth Barr, including:

Expertise: Brokerage firms have teams of experienced financial advisors with a wealth of knowledge and expertise in the financial industry.
Convenience: Using a brokerage firm can be convenient for individuals who don't have the time or expertise to manage their investments.
Range of services: Brokerage firms often offer a range of services, including portfolio management, financial planning, and investment research.
Access to investment opportunities: Brokerage firms often have access to a wide range of investment products and may access investment opportunities unavailable to individual investors.

What are the drawbacks of investment brokerage firms?

There are several drawbacks to using investment brokerage firms like Jarden, Craigs, and Forsyth Barr, including:

Fees: Brokerage firms typically charge fees for their services, which can impact a portfolio’s overall investment return.
Limited control: When you use an investment brokerage firm, you rely on financial advisors' expertise to make investment decisions. This reliance can be a drawback for individuals who want more control over their portfolios.
Limited transparency: It's important to carefully review the fees and costs associated with using a brokerage firm and understand how they're being paid. Some firms may not be transparent about their fees, which can concern some clients.

Are investment brokerage firms worth the cost and time?

Investment brokerage firms can make sense for individuals who don't have the time or expertise to manage their investments. These firms offer a range of services and have access to a wide range of investment products, which can benefit individuals looking to diversify their portfolios and achieve their financial goals. However, it's important to remember that brokerage firms typically charge fees for their services, which can impact the overall investment return.

Ultimately, if you’re comfortable paying the additional fees compared to DIY investing and can see value in some of the services that investment brokerage firms like Forsyth Barr, Craigs Investment Partners, and Jarden offer, then becoming a client of an investment brokerage firm may be a good option for you.

MoneyHub Founder Christopher Walsh shares his comments about Brokerage Firms and what you need to consider:

"The investment world operates on risk and reward; your success depends on the expertise and market insights you benefit from. In New Zealand, investment brokerage firms have positioned themselves as crucial partners in this complex market. Firms such as Forsyth Barr, Craigs Investment Partners, and Jarden offer investors a gateway to a wide array of financial instruments, from equities to bonds, and provide research that can be indispensable for making informed decisions.

However, it's crucial to acknowledge that these institutions are not infallible. Their vast resources can provide stability and insights derived from data and trends, yet their recommendations are not fail-safe. The market is a living, breathing entity that often defies the most educated predictions. Investors relying on brokerage firms must understand that while they can navigate the market's currents, they cannot control the tides.

The fee structure of brokerage firms is another factor that investors need to scrutinise. For their expertise, market access, and the convenience of managed portfolios, their fees can be seen as a necessary expenditure. However, investors must calculate whether the value gained ultimately justifies the cost. It's not just about the percentage taken in fees but the cumulative impact on investment growth over time. In some cases, these costs can significantly reduce the compounding potential of the investments.

Additionally, the size and scale of brokerage firms can mean that smaller individual investors may not receive the same level of personalised attention as larger clients. It's a volume business, and smaller portfolios might not command the priority or personalised advisory that can make a difference in wealth accumulation. This is not a universal rule but a consideration that needs to be weighed.

While brokerage firms play an integral role in the investment ecosystem, they are only one option on the investing spectrum. Every investor must assess their financial goals, risk tolerance, and the degree of control they wish to exert over their investments. The use of brokerage firms should align with a strategy that acknowledges the advantages and limitations of such a partnership".

Christopher Walsh
MoneyHub Founder

Understanding Financial Advisors

What are financial advisors? Who are the main financial advisors in New Zealand?

Financial advisors provide financial advice and guidance to clients on various topics, including investments, retirement, tax and estate planning. Independent financial advisors are not affiliated with any specific investment company or brokerage firm and can provide unbiased recommendations based on a client's financial goals and risk tolerance.

Many independent financial advisors are available in New Zealand, each with their own areas of expertise and focus. Our comprehensive list of all the financial advisors in New Zealand has more details.

What are the benefits of financial advisors?

There are several benefits to using financial advisors, including:

Expertise: Financial advisors have a wealth of knowledge and experience in the financial industry, which can benefit individuals who may not have the time or expertise to manage their investments.
Unbiased advice: Financial advisors are not affiliated with any specific investment company or brokerage firm and can provide unbiased recommendations based on a client's financial goals and risk tolerance.
Personalised recommendations: Financial advisors can provide recommendations based on a client's circumstances and needs.
Range of services: Financial advisors can provide various services, including financial planning, retirement planning, and estate planning.

What are the drawbacks of financial advisors?

There are several drawbacks to using financial advisors (similar to that of investment brokerage firms), including:

Fees: Financial advisors typically charge fees for their services (generally either a flat fee or a percentage of assets under management in the range of 0.5 - 1%), which can impact investment returns.
Limited control: When you use a financial advisor, you rely on their expertise to make investment decisions. This reliance can be a drawback for individuals who want more control over their portfolios.
Significant variance in quality between financial advisors: With so many financial advisors in New Zealand, it can be difficult to sift through the list and find the best one that suits your personal preferences, risk appetite and needs. Some advisors may not be transparent about their fees, while others may not be as attending to your needs, which can be a concern for some clients.

Are financial advisors worth it?

Using a financial advisor can be worth it for individuals who need help with financial planning and investment decisions. Financial advisors have a wealth of knowledge and experience in the financial industry, which can benefit individuals who may not have the time or expertise to manage their investments.
However, it's important to remember that financial advisors typically charge fees for their services, which can impact an investor’s overall investment return. Therefore, it's important to carefully review the fees and costs associated with using a financial advisor and consider whether the benefits outweigh the costs.

MoneyHub Founder Christopher Walsh shares his comments about Financial Advisors and what you need to consider:

"The role of financial advisors is crucial but can be complicated by how they are paid. The main concern with some financial advisors is the potential for a conflict of interest when they earn commissions based on the funds they invest your money into. This issue isn't universal, as many advisors are committed to providing unbiased advice that's in the best interest of their clients. However, it's an aspect of the industry that can't be ignored.

Transparency is the key to addressing these potential conflicts. Investors need to understand their financial advisor's compensation structure. Advisors who work on a commission may be incentivised to recommend products that give them a higher return. In contrast, fee-only advisors are compensated for their advice, regardless of the investment products chosen by the client.

Selecting a financial advisor should include a thorough review of their credentials, investment approach, and how they are compensated. An ideal financial advisor is one whose interests are aligned with your financial goals and who is transparent about their methods and how they're compensated. Our guide to financial advisors has details and questions to ask (and what answers to expect).

The goal is to find an advisor who acts with honesty and integrity, prioritising your financial well-being over their financial rewards. A reliable advisor is straightforward about fees, strategies, and their dedication to your financial success. It's important to take the time to find this advisor, ensuring they are the right fit for your investment needs and that they are committed to helping you achieve your financial objectives."

Christopher Walsh
MoneyHub Founder

Frequently Asked Questions

Choosing between DIY, a broker and a financial advisor takes serious considerations. We have grouped the FAQs below into general, fees/returns and understanding the different options. We continue to develop and update this guide; if you have any questions, please contact our research team.

1. General Frequently Asked Questions for Anyone Starting Out:

I don't currently invest my money. So how do I know if I'm ready for DIY investing?

Before diving into DIY investing, it's important to consider whether you have the time, expertise, and risk tolerance for this investment. For example, suppose you're unsure of your financial knowledge or are uncomfortable with the risks involved. In that case, it may be worth considering other options, such as using an investment brokerage firm or financial advisor. It's also important to carefully review the fees and costs associated with each option and understand how they will be paid before deciding.

Is DIY investing worth it?

DIY investing can be worth it for individuals with the time and expertise to manage their investments and comfortable with the risks involved. However, it's important to carefully consider your financial goals, risk tolerance, and budget before making a decision.

How risky is DIY investing?

The risks of DIY investing include the potential for financial losses, the time and effort required to manage your investments, and the potential for making poor investment decisions if you don't have a solid understanding of the financial markets.

DIY investing can be risky, especially if individuals don't have a solid understanding of the financial markets and the investments they're making. Therefore, DIY investors must research and make informed decisions based on their financial goals and risk tolerance. However, the level of risk involved in DIY investing can be minimised by diversifying your portfolio, regularly monitoring your investments, and making adjustments as needed.

How do investment brokerage firms like Craigs and Forsyth Barr differ from investment funds like Milford?

Investment brokerage firms, such as Craigs and Forsyth Barr, provide various services, including portfolio management, financial planning, and investment advice. Investment funds, such as Milford, are investment products that pool together money from multiple investors and invest it in various assets. A professional fund manager typically manages investment funds, and investors receive a share of the profits or losses. Brokerage firms and investment funds differ in their services and how they generate investors' returns.

Can I use a financial advisor and a brokerage firm simultaneously?

It's possible to use a financial advisor and a brokerage firm simultaneously. So, for example, you could invest and get investment research from a firm like Milford whilst getting tax advice from a financial advisor. However, it's important to consider the costs and benefits of using both and ensure they align with your financial goals and risk tolerance.

Can I switch between DIY investing, investment brokerage firms, and financial advisors at any time?

You can switch between DIY investing, investment brokerage firms, and financial advisors anytime. However, there may be costs associated with making the switch (known as entry and exit charges). Therefore, it's important to carefully review the fees and costs associated with each option before deciding to ensure that it's in line with your financial goals and risk tolerance. If you don't, you risk overpaying fees when switching between the three investment methods.

How do I choose the right share trading platform for DIY investing?

There are several factors to consider when choosing a share trading platform for DIY investing, including the fees and costs associated with the platform, the range of investment products available, and the platform's user-friendliness. It's also important to consider any additional features or services the platform offers, such as educational resources or research tools.

It's a good idea to compare multiple platforms and carefully review the fees and costs before deciding. For a more detailed breakdown of the different share trading platforms available New Zealand, visit our investment apps comparison guide.

Can I invest in domestic and international markets with DIY investing, investment brokerage firms, and financial advisors?

All three options - DIY investing, investment brokerage firms, and financial advisors - offer the ability to invest in domestic and international markets. However, the specific investment products and opportunities available may vary depending on your chosen option.

I'm heavily risk-averse and don't like losing money. So how do I protect my investments from risks?

There are several ways to protect your investments from risks, including diversifying your portfolio, investing in low-risk products, and using investment tools such as stop-loss orders. It's also important to carefully review the fees and costs associated with each option and understand the risks involved before making a decision. For a comprehensive guide to investing when you’re risk averse, read our investing platform breakdown.

I want to build my retirement nest egg for the future. How do I manage my investments over the long term?

Managing your investments over the long term involves regularly reviewing your portfolio and making adjustments to ensure that it aligns with your financial goals and risk tolerance. Using an investment brokerage firm or financial advisor can help with long-term investment management, as they can access various tools and resources to help with portfolio management.

2. Fees and Returns When Investing - Frequently Asked Questions:

What's the cheapest option out of DIY investing, investment brokerage firms and independent financial advisors?

DIY investing is typically the most cost-effective option, as you're not paying for the services of a brokerage firm or financial advisor. However, it's important to remember that DIY investing can be risky if you don't have a solid understanding of the financial markets and your investments.
Using an investment brokerage firm or financial advisor can be more expensive than DIY investing, as these firms typically charge fees for their services. However, these firms may also have access to a wider range of investment products and opportunities, potentially resulting in higher returns.

Will I get higher returns using a financial advisor than trading on share trading platforms or DIY investing?

No guarantee using a financial advisor will result in higher returns than trading on share trading platforms or DIY investing. Therefore, it's important to carefully review the fees and costs associated with using a financial advisor and consider whether the benefits outweigh the costs. It's also important to remember that past performance is not necessarily indicative of future results, and investing always carries some risk.

Will I pay more short-term and long-term fees through DIY investing, investment brokerage firms or financial advisors?

The fees associated with DIY investing, investment brokerage firms, and financial advisors can vary depending on the services offered and the fees charged. DIY investing typically has the lowest fees, as you're not paying for the services of a brokerage firm or financial advisor.

However, investment brokerage firms and financial advisors may offer a wider range of services and expertise, which may come with higher fees. Therefore, it's important to carefully review the fees and costs associated with each option and consider whether the benefits outweigh the costs.

Paying a fee for advice seems like a scam. Can I get higher returns through DIY investing than working with investment brokerage firms or financial advisors?

There is no guarantee that DIY investing will result in higher returns than working with an investment brokerage firm or financial advisor. It's important to consider your financial goals, risk tolerance, and budget before deciding. While fees may seem like a burden, it's important to remember that investment brokerage firms and financial advisors offer various services and expertise that can potentially result in higher returns.

Is there a minimum net worth I can consider switching from DIY investing to an investment brokerage firm or financial advisor?

There’s no specific net worth threshold for switching from DIY investing to an investment brokerage firm or financial advisor. Instead, it's important to carefully consider your financial goals, risk tolerance, and budget and review the fees and costs associated with each option before making a decision. When switching, it’s less important to have a minimum net worth threshold and more important to address a need that isn’t currently being addressed.

Some reasons you may want to consider switching from DIY investing to an investment brokerage firm or financial advisor include a lack of time or expertise to manage your investments, changing financial goals, or the costs of DIY investing becoming too burdensome.

How do I review and compare the performance of DIY investing versus investment brokerage firms or financial advisors?

To review and compare the performance of DIY investing versus investment brokerage firms or financial advisors, you can look at the returns on your investments over time and compare them to benchmark indices or industry averages. You can also consider factors such as the level of risk involved, the fees and costs associated with each option, and the range of services and resources offered.

What are the different classes of financial advisors? How do the levels of service and cost change?

There are several three types of financial advisors; independent financial advisors, firm-specific financial advisors and robo-advisors. Independent financial advisors offer various services and typically work with various financial products. However, there are also financial advisors are affiliated with a specific financial institution and may only offer products from that institution - these are firm-specific. Finally, robo-advisors are automated investment platforms that use algorithms to create and manage investment portfolios, but this has not proven to be popular in New Zealand as people prefer meeting with a person. The levels of service and cost can vary depending on the class of financial advisor and the specific services offered.

What main costs do financial advisors and investment brokerage firms have?

Financial advisors and investment brokerage firms may have a range of costs, including employee salaries and benefits, marketing and advertising expenses, and the costs of investing in funds. In addition, they may also charge additional fees for their services on top of the standard percentage of funds under management (FUM), such as fund management fees, financial planning fees, and transaction fees.

3. Understanding the Different Options Available - Frequently Asked Questions:

Are investment brokerage firms with higher assets under management always a better option?

Investment brokerage firms with higher assets under management may offer lower fees as they may have economies of scale and be able to pass on some of those savings to their clients. Investment brokerage firms with higher assets under management may also have a longer track record and more experience, which can be a positive factor. Larger investment brokerage firms may not always provide the best fees and customer experience. It's recommended to test out each investment brokerage firm before committing to them as a customer.

How can I determine how much assets under management an investment advisor has in New Zealand? Do investment advisors legally have to disclose these figures?

Investment advisors in New Zealand generally disclose their assets under management as part of their reporting requirements. You can find this information on the advisor's website, in their annual report or by contacting the advisor directly.

Are there any real differences between the top investment brokerage platforms?

There may be differences between the top investment brokerage platforms in terms of the fees and costs associated with their services, the range of investment products available, and the user-friendliness of their platforms. Therefore, it's important to carefully review the fees and costs associated with each option and consider whether the benefits outweigh the costs. It's also a good idea to research the reputation and track record of the platform and consider any additional services or resources they offer.

How can I determine if regulators have investigated a financial advisor for fraud or stealing?

You can check the Financial Services Providers Register (FSPR) maintained by the Financial Markets Authority (FMA) in New Zealand to see if a financial advisor has been investigated or disciplined by regulators. The FSPR also provides information on the advisor's qualifications, experience, and any conflicts of interest.

What's the difference between investing in funds held in a trust with beneficial ownership to the individual investor and investments held by a "custodian"?

Investing in funds held in a trust typically means that the assets are held by a trustee on behalf of the investors, with the investors holding beneficial ownership of the assets. Investments held by a custodian are typically held by a third party on behalf of the investors, with the custodian acting as a guardian of the assets. Therefore, it's important to carefully review the terms and conditions of any investment and understand the roles and responsibilities of the trustee or custodian.

Is there a conflict of interest in investment advisors recommending their investment funds?

There may be a potential conflict of interest if an investment advisor recommends their investment funds, as they may have a financial interest in the funds' success. Therefore, it's important to carefully review the fees and costs associated with any investment and consider any potential conflicts of interest before deciding.

Are there any benefits to working with investment brokerage firms that trade higher volumes than other platforms or advisors?

Working with investment brokerage firms that trade higher volumes may offer some benefits, such as potentially lower trading costs and faster execution of trades. However, this may not always be the case.

How can I work out if I’m overpaying for my financial advice compared to the other firm’s competitors?

To determine if you're overpaying for your financial advisor, you can compare the fees and costs associated with different firms and consider whether the benefits outweigh the costs. You can also research the reputation and track record of the firms and consider factors such as the range of services and resources offered, the level of risk involved, and the alignment with your financial goals and risk tolerance.

What are the main fees associated with investment firms?

There are several types of fees associated with investment firms, including management fees, brokerage fees, entry or exit charges, and other fees for services such as financial planning or portfolio management:

Management fees are typically charged as a percentage of the assets under management and are used to cover the investment's costs.
Brokerage fees are charges for buying or selling securities on behalf of the investor.
Entry or exit charges may be applied when an investor enters or exits a fund or investment product.

Is the equity research that investment firms do valuable? How should I value the research that these investment firms undertake?

Equity research conducted by investment firms can be valuable as it provides insights and analysis on specific companies or industries. However, it's important to consider the source of the research and any potential conflicts of interest. It's also a good idea to review multiple research sources and consider the research in the context of your overall investment strategy and financial goals.

Is there a way to test an investment brokerage firm or financial advisor before formally agreeing to work with them?

One way to test an investment brokerage firm or financial advisor before formally agreeing to work with them is to ask for a trial period or a limited engagement to see how well they align with your financial goals and risk tolerance. You can also ask for references or speak with other clients to get a sense of their experience working with the firm or advisor. It's also a good idea to research the reputation and track record of the firm or advisor and consider factors such as the range of services and resources offered, the level of risk involved, and the fees and costs associated with their services.

Is there any benefit to working with multiple investment fund providers?

There may be benefits to working with multiple investment fund providers, such as the opportunity to diversify your portfolio and potentially reduce risk. However, it's important to carefully review the fees and costs associated with each option and consider whether the benefits outweigh the costs. It's also a good idea to consider your financial goals and risk tolerance and ensure that your portfolio is properly diversified.

Related Guides: