The Economic Impact of Investment Management Consultants: Do They Deliver Value?

Investment management consultants offer their clients expert advice on which financial investments to pursue in the given economy. Many of these consultants take large fees in return for their services, either as a percentage of the profits or as a percentage of all investments placed with them for management. Because consultants make money off of this process, there is a large question about their viability as impartial advisors. Many believe they add little to the economy other than noise. Ultimately, however, investment management consultants add value in the following ways:

• The primary need for advisors is to encourage investors to actually invest money. Few people would be comfortable managing their own portfolio of investments which means there would be much less access to capital without investment consultants.
• Investment consultants receive a management consulting certification which ensures they follow both regulations and business ethics. Without this formalized certification, people would not be able to trust investment advisors.
• Investment banking consulting typically requires a high-level certification such as a Series 7 financial education certification. Few common investors would have the time or education level to pass these exams and truly understand the market.
  
  

The fact of the matter is the stock market is a much more complicated machine than most people realize. As a result, few people truly understand all of the factors that go into successful investments that consultants are necessary to steer proper decisions. Consultants share their expertise for a fee, and not all are ethical or productive. However, as a profession, investment consulting contributes richly to the developed economy.