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Nadeem Walayat Financial Markets Analysiis and Trend Forecasts

Why it is Still Best to use an Agent for your Financial Investments

Stock-Markets / Investing 2019 Mar 28, 2019 - 07:50 AM GMT

By: Submissions

Stock-Markets

When it comes to investments, any one of us might be tempted to go it alone. Gone are the days when there was no other way to access the markets save through a stockbroker, and you needed to make an appointment with your bank manager in order to move your money around. Now, anyone can buy, sell, invest and manage their portfolio online, provided they have the inclination and a modicum of financial understanding.

Nevertheless, there is still much to be said for going through an agent when it comes to managing your investments. An investment agent can be broadly described as any person or body empowered to represent or act on behalf of another person or party in financial negotiations. Depending on the nature of the contract between agent and client, the agent will be authorised to perform certain services and to act in the client's interests in certain matters. Because of this, the agent cannot enter into other contracts that may create a conflict of interest.


What is meant by an agent?

Types of agents might include attorneys (legal agents) and stockbrokers, who act as agents on behalf of clients in dealings with the stock market. Stockbroking is just one of the services offered by a large asset management firm, which will also manage a client's portfolio, buying and selling on their behalf and according to their instructions, alongside other services as specified. Al Masah Capital is one of the most successful alternative asset management and advisory firms currently operating across the Middle East, North Africa and South East Asia. From its Dubai headquarters, it provides bespoke solutions, management and advice to a wide range of private and corporate clients.

What kind of relationship do I have with an agent?

An agent and client have what is called a Fiduciary Relationship, which basically means that the agent is authorised to carry out financial transactions on behalf of the client (often referred to as the principal). A universal agent can act on behalf of the client fairly independently, and has a broad range of powers. These may include power of attorney as well as a financial mandate. A general agent represents the client in specified transactions for a specified period. A special agent is authorised only for a single transaction or body of transactions within a short, specified period of time.

What are the reasons for using an agent?

The great advantage of having an agent manage your affairs is that they can perform the tasks that you don't have time for. You can delegate your agent to look after your investments while you attend to other aspects of your business, or simply sit back and relax.

Another reason to use an agent is that you are making use of their expert knowledge and experience. A good financial agent is a professional at working the markets and maintaining a healthy, balanced portfolio. Unless you are prepared to dedicate all of your time and energy to researching and playing the market, and have a natural talent for investing, using an agent is the safest and most profitable way to manage your investments. The small fee or commission they charge will be more than recovered as you profit from their services.

Using an agent is also a way to maintain anonymity in your financial dealings, which may be useful or preferable in many ways. A lot of us would prefer to keep our finances private, and going through an agent means that your name will not be publicly linked with your investments. For well-known clients this could be particularly helpful.

Even outside of the stock market, agents know the territory in ways that those of us who are not active in the industry do not. They are able to review and advise on contracts, know who to trust and who to avoid, and generally command a respect that makes them a force to be reckoned with in negotiations.

For all these reasons, it is still preferable to go through an agent when making and managing investments, even though the internet has made the world of finance far more accessible to all. There is still much to be said for expert knowledge and the benefit of experience, as well as for letting someone else take these time-consuming tasks off your hands. If you go through an established, reputable firm, then using an agent is by far the safest and most reliable way to manage your investments.         

By Jonathan

© 2019 Copyright Jonathan - All Rights Reserved Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


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