How to Become a Registered Investment Advisor

Registering an Advice Body
The advisor manages the assets of individuals and institutional investors, and performs the fiduciary duty to their clients of choosing the best possible investments for them, and providing full disclosure of transactions and ensuing fees. The investments may be in the form of stocks, mutual funds, hedge funds, or a combination of one or more forms of investment.

Registration of an investment advice body can be done in three ways, depending upon the sum of market value of assets being managed by that firm. This sum, commonly known as Assets Under Management (AUM), forms the basic registration criteria for the process of registration. While the exact definition of AUM is not clear, for registration purposes, the definition given under Form ADV Part 1, of the SEC, is used.

To register your investment advice firm with the SEC, you have to first determine the amount of AUM that your firm is managing. The amounts can be divided into 3 categories:

1. Up to $25 million
2. between $25 million and $30 million
3. above $30 million

Up to $25 Million
If your investment advice firm is not currently managing a sum of $25 million and does not anticipate managing $25 million within 120 days of registration, the firm has to register itself with the state in which it is operating.

$25 to $30 Million
If your AUM ranges between $25 and $30 million, you have the choice of either registering with the SEC, or with the state in which your firm is operating.

Above $30 Million
If your AUM is over $30 million, then the registration has to be done with the SEC.

Becoming an Investment Advisor
The first step is to figure out your AUM and the jurisdiction under which your investment advice firm falls. The firm

Questions to Ask a Financial Planner

A financial planner is a practicing professional who helps people deal with personal financial issues in areas like cash flow management, retirement planning, investment planning, risk management, tax planning, estate planning, and even business succession planning. Basically he/she is a person who will help you, if you have no clue on how to go about handling and managing your finances. In case you are hiring the services of a planner, there are certain things that you should be clear.

Important Questions to Ask

What are your areas of specialization (if any)?
It is always better to have a person who specializes in an area that you need help with – be it taxes, investments, or insurance. A specialized person can definitely help you better than someone who is a jack of all trades.

For how many years have you been in this profession?
This question helps to build credibility since you don’t want a dabbler to handle all your finances. It is also better to have references from credible clients. Do not hesitate to confirm the credibility, after all, you need to establish trust to hand him/her the rights to plan your financial matters.

How exactly can you help me manage my expenses?
This question will help you fathom, how exactly your relationship will work. This is an important question which will define the terms and conditions of the contract, and the responsibilities of your planner.

Do you have clients with similar needs?
This will guarantee whether the planner has experience in providing advice on similar products or a specific product that you are looking for. It would help if you can contact these clients and get their feedback on his/her services.

What is the remuneration that you are looking for?
Be very clear and specific while discussing the remuneration,

What are the Duties of a Financial Planner

A financial planner is a professional who helps us with our financial issues. He is of great help in areas such as personal financial planning, investment planning, risk management, and insurance, as also in cash flow management. Here we take a look at the duties of financial planners and their job responsibilities.


He provides his clients with valuable guidance in taking major financial decisions and informs them about the short-term and long-term consequences of the same.

He helps the clients assess their financial assets, determine their financial goals, and weigh their economic resources to take investment decisions.

The duties of a financial planner also include the setting of financial goals with the client, gathering the client’s financial information, analyzing it, and designing a financial plan for him. It is a financial planner’s duty to implement the planned financial strategies and monitor the client’s financial decisions.

A financial planner helps the clients in risk management by assisting them in choosing suitable insurance schemes. He helps them plan for the future by providing them with well-suited investment options. He helps the client ensure financial independence on retirement, by helping him choose the proper retirement investment plan. He advises the client on how to reduce his tax liabilities and enhance cash flow. A financial planner also deals with the conservation and distribution of the financial assets of his client.

Job Description

A financial planner studies the different aspects of the financial status of his client and provides a suitable solution for existing and potential financial problems, if any. Some financial planners deal with the various facets of personal finance, while others specialize in fields like risk management or retirement planning.

The job of a financial planner can be described by means of a 6-step process given by the ISO.

– The first step is of

Choosing an Investment Advisor

Investment advisors provide advice to their clients on securities. In other words, they are individuals who specialize in advising people on investing in mutual funds, bonds, stocks, commodities, or real estate. Some advisors also manage their client’s portfolio of securities.

How are They Different from a Financial Planner?

While most financial planners are also investment advisors, all investment advisors may not be financial planners. Financial planners generally assess all aspects of a client’s financial needs such as estate planning, retirement, taxes, insurance, investments, and savings, and help in developing a financial plan or strategy for meeting his or her financial goals. On the other hand, investment advisors restrict themselves to providing advice on investing in an asset that is likely to generate good returns, or give regular income and/or dividends.

Why do People Need an Investment Advisor?

While most ordinary investors are intelligent people, with many of them being quite well-versed with the market, yet, they are often not very successful with their stint in the market. And that is quite understandable. After all, they make their living doing something else, hence, they do not have the expert knowledge that a professional would have. For example, if you were to fall ill, you would seek the expert help of a medical professional, even though you may be knowledgeable about various health related matters, or you would go to an auto-mechanic if your car had a break down, even though you may have a pretty good idea about cars.

Most ordinary people have a tendency of being ‘off’ in the timing of their investment. For instance, they buy when the market is high and not during the low periods. But to get the best returns on investment, it should be the other way round. The trouble is that most ordinary

Purpose of a Bank Reconciliation Process

Bank reconciliation is the process of reconciling the bank statement balance, with the book bank account balance in the customer’s (client’s) books of accounts. The procedure should result in the tallying of the two balances, i.e., the adjusted bank balance calculated must equal the adjusted book bank balance figure. The process of preparing a reconciliation statement is a structured one, where bank reconciliation forms containing pre-printed items leave omission errors out. These forms are found on the back side of your monthly bank statement hard copies and make the process a whole lot easier. Read the following paragraphs to understand the purpose of a bank reconciliation process.

The purpose behind bank reconciliation is to identify and rectify divergences between the two bank balances. A divergence of the two balances can occur because of one of the following two things:

– Entries counted in the bank statement, not reflected in the account books.
– Entries made in the books of accounts, that are yet to be known to the bank.

Some entries that get missed out in the books of accounts are as follows:

– Bank charges and fees that are directly deducted from the bank’s side, are mostly only known by the business when the bank statement arrives.
– Bank’s collection of receivables, on the business’s behalf, does not get recorded in the books, till the actual bank intimation of receipt, arrives in the form of a bank statement.
– Any deposits made, directly in the bank account, without intimating the business, are recorded in the bank statement, but obviously not in the account books.
– Any interest earned on the bank balance is something that does not get calculated on the business’s side, and hence does not get recorded in the books till an official intimation arrives.
– Any errors from the bank

Mobile Banking Services

Mobile phones are basically communication devices that can be used for several other purposes, such as for executing financial or banking transactions. After internet banking, mobile banking has added another dimension to banking by enabling us to carry out any kind of transactions like payments, balance inquiry, and the transfer of funds, using our mobile phones.

Banking transactions over the mobile phone are usually performed either by sending an SMS message to the bank or by using mobile internet. When you send an SMS message requesting a financial transaction, it goes to the SMS center of your cellular service provider, and from there it travels to the bank’s system. You then receive the response that is sent by the bank via the service provider, all within a few seconds.

Doing Bank Transactions with Your Mobile Phones

Nowadays, banks have come up with a range services for reducing their cost of operation, while providing more easily accessible and faster services to the customers. You can use your mobile banking facilities to inquire the balance of your account, and request a statement or details of the last few transactions and the management of pension and insurance policies. In addition to these, you can request the bank to activate alerts, such as the minimum balance alert.

You can order or request a checkbook or card, and pay bills with the help of mobile banking. It has also made fund transfer (both national and international) quite simple and fast. It can give you the facility of carrying out cash deposition and withdrawals. Some other services include portfolio management services, personalized alerts, notifications on security prices, mobile recharging, etc. You can also receive online updates of stock prices, and perform stock trading as well.

There are generally two ways to classify mobile banking

Types of Bank Accounts

A bank account is a record of the financial transactions between the customer and the banking institution. The banking institutions have provided several types of accounts to cater to the needs of all sorts of individuals. One of the most important functions of banks is accepting deposits, which is aimed towards generating savings for the purpose of utilizing them in profitable investments. People, on the other hand, also prefer to deposit their savings in the banks, as they can earn interest and also avoid the danger of theft.

Though, the types of accounts offered can vary from one bank to another, here are some of the common bank accounts offered by commercial banks.

Checking Account

A checking account is also known as a current account or a transactional account. Money deposited in this type of account can be withdrawn at any time, as there in no restriction on the number of withdrawals and the amount of money withdrawn. Customers are generally given paper checks to carry out day-to-day transactions, like paying bills, making purchases, or transferring money to another account. ATM (Automated Teller Machine) facility is also provided to the customers. However, no interest is paid on the deposited money, and sometimes, customers have to pay a charge to the banks for rendering this service. This type of account is generally maintained by businessmen or concerns, as they have to make a number of financial transactions each day. A transactional account is sometimes called a demand deposit account, as no notice is required to withdraw money, i.e., money is available on demand.

Savings Account

Savings accounts are aimed towards mobilizing small savings from the general public. There are certain restrictions regarding the number of withdrawals and the amount to be withdrawn in a particular time period. However, money deposited

Basics of Investment Banking

An investment bank is a type of financial intermediary that performs a variety of functions such as underwriting, facilitating mergers and acquisitions, or brokerage services for institutions. The work of an investment bank begins right from the counseling before the underwriting sessions, and stretches right till the securities are properly handled and distributed. These institutions play a very crucial role in market transactions on behalf of, or for private and public investors, governments, and corporations. There are some that also provide highly professional services in assisting their clients with industrial know-how on various parameters.

Industries from diverse sectors like media and telecommunications, real estate, industry, finance, health care, consumer products, and various such segments are provided assistance by investment banking services. Along with these, they also deal in the securities trading services, credit counseling, financial engineering, and merchant banking. The primary source of income for investment bankers is the commissions, fees, and gain margins on transactions provided for the above mentioned institutions.

The role of an investment bank as a mediator is to directly familiarize the nature of the investment and the entity being invested in. In case of conventional banking, people deposit finances in the form of cash, assets, and so on with a bank. The bank in turn can lend to a borrower under some standard norms to utilize it in his own way. In the case of investment banking, there is a direct familiarization of both the investor and the borrower. This means that an individual or institutional investor has an option to choose his type or division of investment into any given entity looking out for funds.

Investment banks provide companies with expert guidance and formulate strategies on their behalf for disinvestment, and also to merge or acquire new entities. Good investment banking

Before Buying a Banking Software

Banking software is sort of a vague term, actually. This is because there are a variety of them available in the market. The only difference is who they are made for―that is―their targeted user base. Thus, it is evident that this will change all the dynamics of the software. There would, therefore, be 2 types of banking software, one for individual users, and the other for banks themselves to use. And of course, one must not forget online banking software, which is becoming increasingly popular. So, let us look at the various basic features which banking software must ideally have, depending upon the user type.

For Individuals

Banking software designed for individuals are designed primarily to keep a record of the banking transactions of that individual. It is more or less like a bank passbook, but it’s on the computer. And most of all, it can keep records for several different bank accounts at one time. This way, individuals can keep a track of their spending and bank balances, across different bank accounts. Some of these software are often able to provide the same facilities for different users in the same household. It therefore makes sense to buy a software which provides this feature, especially if your family is going to be keeping track of their records as well.

Also, different standard features include password protection, and budgeting and planning features. There might be software available with portfolio management as a combination. This feature can be useful if you also have a varied stocks and bonds portfolio which you would also like to track. Some software are often compatible with the online or e-banking interfaces of different banks. Therefore, all one has to do is log in to the bank account via the software and then synchronize

The Danger of Banking Abroad

For US-based banks, capping ATM and teller withdrawals, as well as point-of-sale purchases, is standard practice regardless of where you are. But they take that practice to a whole new level as soon as you leave your home country.

When I’m in the States, I’m not actually sure what my daily withdrawal limit from an ATM is-though I’ve had to take out large chunks of cash once in a while, nearly wiping out my balance (to buy a car, for example). But I can tell you pretty definitively what my limit is when I’m not in the States, though. It’s USD 300 per day, and which is a fair bit of money.

But it’s not exactly all that much in certain circumstances. For instance, when my computer died the other day when I was in France, I went to a locally owned store instead of a massive electronics mart. In France, though, small businesses often take only a special kind of debit card: the Carte Bleue. If you haven’t got one, then cash is your only option. (They do this, by the way, to avoid being hit by the massive fees that credit card companies charge them per transaction, fees that allow those companies to offer you points and miles.)

So, off I went to the ATM, and then to the next, and the next. What was going on? Why couldn’t I take out my money? After taking out about 200 Euros (that is just shy of USD 300) from the first ATM, I wasn’t able to get anything more at that or any others. Imagine my frustration!

Now, if this were where the story ends, we’d really all have to agree that my unhappiness was pretty much my own fault. After all, everyone knows that banks put