Understanding The Role Of Equity Advisors

4 mins read
The role of an equity advisor is to help investors find investment scopes in the stock market. Equity advisors bring analytics and experience to your investment.

Over the years, equities have been the best asset class for investing. If we look at the historical performance of equity investment, it has earned more returns than any other asset. The equity market is ripe with opportunities. But the key is to identify the options and make the right decisions, which with good experience, is easier to accomplish. It is where an equity advisor comes into the picture. 

What is equity advisory?

The equity market is vast and complex. Each day you will find thousands of company stocks being traded on the exchanges, each having a unique set of risks, potential and benefits.

It is challenging for new and seasoned investors to find a suitable investment to meet their investment strategy, financial goals, and specific return requirements. An equity advisor is an expert who helps investors with investment decisions. Their job is to guide investors in the right direction and help them find scopes in the stock market.

The role of an equity advisor 

To invest in the Indian stock market, which involves a certain amount of risk, you need adequate knowledge and experience to understand market dynamics to maximise returns on your portfolio. Even though you are an experienced investor, you can still make mistakes. The main function of an equity advisor is to assist investors with expertise in finding lucrative investment scopes in the equity market. 

Equity investors are trained professionals with the proper knowledge and skills to manage equity investments. They know the time-tested investment styles to find the best investment strategy according to your financial goals. And for offering their services, they will charge a fee, which is usually nominal.

Understand your financial goal

Understanding the client’s financial goal is one of the critical skills of equity investors. They would learn your short-term, mid-term, and long-term financial goals and risk appetite to recommend suitable investment options.

Choose the right stock

There are two avenues to invest in the equity market – direct equity investment, where the investor buys stocks in the stock market. The other option is mutual fund investment, where you invest in a pooled fund that gets invested in a diversified portfolio. An equity advisor has the analytical skills and market insights to pick the right stocks and mutual funds to invest on your behalf.    

Build investment portfolio

As an investor, you should diversify your portfolio to minimise risk. However, often individual investors make single investment choices in an asset class, which increases their risk exposure. Equity advisors with a keen eye for analysing risk and your investment objectives help you build a concrete portfolio that will earn maximum returns. 

Take timely investment decisions 

An equity investor has a dedicated team and resources to study the market and recommend the best entry and exit for investors. They can keep a watch on market developments to make timely investment decisions. They bring objective advice to your investment, making recommendations based on your portfolio and predetermined financial goals. 

Build long-term investment plans

New investors often believe that the key to making a significant profit in the stock market is to enter and exit the market quickly at the opportune moment. It is far from the truth. The equity market has generated better returns for investors with an extended horizon. 

Equity brokers are also called share market brokers or mutual fund advisors depending on the type of investment they handle. They are professionals trained to understand your financial goal and recommend the right investment style based on the evaluation. They also help the investors set their expectations right.

However, it is critical that the equity advisor India service you select has a good reputation and belongs to a reliable institution.