Question

Many people entrust their investments with investment advisers. How does a Christian who trusts an investment adviser make the investment adviser accountable for the results of the investing? Does the investment adviser need the approval of the investor prior to making investments? If so, does this modify the accountability standard? Is an individual without investment expertise able to approve an investment plan proposed by an investment adviser? See Matthew 25:14-30.

Requirements: 250

Answer 1

Investment advisers manage money. They select financial assets—like stocks, bonds, and mutual funds—and then buy, sell, and monitor them within your account in keeping with your investment goals.

Mutual fund companies are generally included in the definition of investment advisors, but stockbrokers are not as they receive fees from commissions and not asset-based compensation. Most investment advisors charge either a flat fee for their services or a percentage of the assets being managed. Generally, there are very limited conflicts of interest between investment advisors and their clients, because the advisor will only earn more if the clients' asset base grows as a result of the advisor's recommendations and securities selection.

Investment advisor is made accountable by reducing the commission payable to him for his error in choosing the inappropriate option of investment which is unworthy

Yes there should be a proper approval before investing which would make the investor aware about the gross investment opportunities, however it may not modify the accounting standard to a greater extent,

Investment expertise is essential to approve a plan as a clear analytics exist with them about the plan