How to Become an Investment Adviser

Added: (Wed Sep 22 2010)

Pressbox (Press Release) - Have you ever been interested in becoming an Investment Adviser, but you did not know where to start, or fully understand exactly how advisers make their income in a world of discount brokerage firms and market corrections. If you wish to become an Investment Adviser, then you must complete what is known as PS 146 training before becoming employed as an Authorised Representative of an Australian Financial Services License (AFSL) holder.

During my time as an Investment Adviser, the competition from discount brokerage firms has been very minimal. My financial services company has operated a discount on-line brokerage division for several years now and the bulk of our revenues are still derived from full service advisory. The vast majority of investors still take investment advice, with the remainder being sophisticated amateurs, professionals or undisciplined punters. The main reason that discount brokerage firms do not capture market share is because trading and investing is about strategy, which takes years of experience and training. It is not about simply executing trades on a computer screen via the Internet.

The PS 146 is an Australian Securities & Investment Commission (ASIC) regulatory requirement, and must be completed before gaining employment within the industry. If you wish to be employed as an Investment Adviser dealing in stocks, futures, contracts for difference (CFDs) or initial public offerings then you must complete the courses for dealing and advising in securities and derivatives for both retail and wholesale clients. There is no experience required to become an Investment Adviser, because it is a career that is mostly learned from actual on the job training. A financial market or economic educational qualification will definitely help, but is not crucial. If you do not have a specific qualification, then you are usually expected to have experience in another industry and higher education as a minimum. Do not believe the ridiculous myth that Investment Advisers do not require a higher education or specific course completion to land their first job.

Prior to the regulators introducing the PS 146 minimum education requirement, the industry self regulated and expected higher education as a minimum from the majority of their applicants, unless the applicant could prove superior market knowledge. PS 146 educational providers can be easily found by searching the Internet, and it is now only a short course to "get a foot in the door". I would suggest that you talk to an AFSL holder and arrange employment before you undertake the PS 146 training to make sure you are studying the correct modules. I have had people apply for employment positions that did not ask the question and thought they had studied the correct courses, but were still unqualified in what they specifically wanted to pursue within the industry.

You may be wondering how an Investment Adviser makes a regular income when the share market moves in cycles, and occasionally corrects like we have seen over the last twelve months. For example, the average retail stock market client is less active at the moment, but futures & CFD clients are currently booming due to the long and short-selling activity in the commodity markets. There is always trading opportunities available, for smart dealers and their clients. I have found that the average person believes an Investment Adviser or Stockbroker only executes trades on physical shares, but that is definitely not the case. We trade everything from physical shares to commodity futures with a considerable income coming from capital raisings for new initial public offerings (IPO deals) and unlisted managed investments. It only makes sense that the best stock and commodity traders in the world worked in the industry to gain their experience and market knowledge.

There are several different directions you can pursue as an Investment Adviser, and my favorite has always been research into mechanical trading techniques, which is the development of trading strategies based on algorithms. Mechanical trading can be defined as methods of generating trading signals and quantifying risk that is independent of the trader's discretion. It becomes a highly interesting and rewarding career when you can spend your time developing techniques to consistently beat financial markets. If you are the type of person that enjoys strategic games such as chess or other similar activities, then financial market advisory is a career move worth considering.

Another very rewarding direction within the financial services industry is the capital raising sector. I make a good side income from raising money for new IPOs and unlisted property trusts. I have worked with people in the past that have made capital raising their main career focus, and they make several hundred thousand dollars per year consistently raising money for new IPO and seed deals. Many of the pre-listing seed deals can give the adviser and their clients the opportunity to buy shares at a discount to prospectus price. These advisors can potentially move over to the corporate advisory side and become involved with listing new companies on the Australian Securities Exchange, with some advisers actually becoming directors of publicly listed companies with very attractive incomes.

Authorised Representatives can usually earn from $70,000 to $600,000 per annum depending on their ability, ambition and market knowledge. If the Authorised Representative is reasonably good, then $250,000 p.a. should be easy work by using automated mechanical trading methods combined with new IPO deals. We usually deal with clients throughout Australia and the world, which gives us the opportunity to write our own incomes like any other high turnover business venture, but without the usual expenses and limitations. I have talked about income, but please always remember that Investment Advisers help people build wealth for retirement, raise capital for private and public companies that can create employment opportunities, and they perform advisory and order execution services for clients wishing to hedge or speculate.

If you have ever dreamed of becoming a professional Investment Adviser, then now is the time to start learning and applying for positions. I have easily survived several market corrections, and have always made an exceptional income over the course of my career. If you consider yourself entrepreneurial and are looking for a good business opportunity that can produce consistent income during all economic conditions then consider becoming an Investment Adviser.


Eric have been writing articles for nearly 2 years. Come visit his blogs more often for tips and advice that helps people with the interest for financial service advice and great passion and knowledge for financial service advice and all the different options & providers available in the market today. Find out for more info also here financial service advice

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