The key to earning a large sum of money and achieving financial goals is to diversify the sources of income. Due to this reason, it is essential to hire investment advisors since the guidance from these professionals is worth its weight in gold.
However, the key concern is how many of these people should you hire? Is it okay having multiple investment advisors? After all, getting advice from various people will help make the right decision.
Why more than one investment advisor isn’t a good idea
When it comes to managing investments, having more than one advisor will cause a lot of inefficiencies.
- Reduces diversity of a portfolio
One reason there is a lack of diversification is that when there are multiple investment advisors, there is a high chance of having similar stakes; which defeats the purpose of diversifying the portfolio. Having a broader range of financial assets is crucial to increasing income for individuals.
- A massive increase in invested time
When you hire investment advisors, you should meet them at least twice every year to discuss the assets. With multiple professionals on the payroll, people need to spend more time talking to them. Not only are they investing large portions of their time, but they also need to digest immense volumes of information. In the end, they may not make the right decisions, which can affect the return on investment.
- Not enough resources to meet minimum requirements
When using multiple investment advisors, you will have to split your funds to make sure both professionals have adequate funds. As a result, they may not have the minimum amount to make investments in the right areas. In the long run, this will affect how much the investors receive.
- High fee, low return
Every investment advisor will charge a fee for managing all assets. However, this cost fluctuates on the size of the holdings. With greater investments, investment advisors will charge lower fees. When you hire multiple professionals to handle your assets, it reduces the amount that you could earn.
So how many investment advisors are ideal?
The best option is to hire a single investment advisor so that financial security is in the hands of the right professional!