Selecting Financial Advisory Companies in Kenya – What to Look for? | Audit and Accounting Firm in Kenya

If you fall ill for a day, the first thing you do is head to a chemist and get an over-the-counter medicine. What if the illness still persists? You go to a doctor. The reason is, you know they are the experts when it comes to health conditions. That’s exactly what happens with the financial matters. The financial advisors are the experts. There is no doubt about that. Everything that you do, starting from your career to your lifestyle – is about how you shall earn it, save it, invest in it and benefit from it. Looking after your finances is of paramount importance, but it is not that easy to do it on your own. This is exactly why you need professional advisory companies.

With the emerging and evolving economic conditions in Kenya, the country has also observed an increase in the number of financial advisory companies. The financial advisory companies in Kenya has helped innumerable small and large scale business firms to properly plan their finances and investments. Till, now, we were speaking about the generic importance of a professional financial advisory company. Let us focus on the specific factors where the financial advisory companies in Kenya are extremely important.

Importance of Financial Advisory Companies in Kenya

Professional Experience: When you are looking to get a job done, you ought to hire professionals. The professional financial advisory companies in Kenya can manage your finances, offer the best advice and expertise on the investments that you can make. Their professional expertise will allow you to seize opportunities and make necessary changes to complement the situations in your life. The financial advisory companies in Kenya can help you chart out the financial goals. Their recommendations can even help you achieve the improbable and ambitious goals as well.

Monitoring Your Finances: Financial advisory companies in Kenya has the mandate to monitor the investments of their clients. Most of us don’t have the time to monitor their investments once they did it. A financial advisor can suggest changes in your portfolio. They can even recommend when to exit or enter a particular asset class. They can foresee if you need to change or realign a particular investment.

Avoiding Costly Mistakes: This is one of the most important benefits of hiring financial advisory companies in Kenya. You will be able to avoid costly mistakes. Such mistakes that can destroy your financial portfolio. If you do it by yourself, then, you might save some fees, but you could lose far more due to lack of an educated eye and misjudgment. A professional advisor seeks for gaps within the financial strategy and highlights the costly dangers that you might face if you don’t have a long-term financial strategy. The financial advisor will help you in forming a long-term financial strategy, help in insurance protection and ensure that all the fees and taxes are up to date.

Overall Support System: It is pretty common for us to get scared and confused in case of unfortunate incidents like divorce, deaths or other losses. Under such circumstances, a financial advisor can help you in managing the finances. It is good to have someone trustworthy with whom you can discuss your personal and professional issues.

The Types of Financial Advisory Companies in Kenya

In this section of the article, we are going to discuss the different types of financial advisory companies in Kenya. Generally speaking, there are mainly two types of financial advisory firms. First, the ‘fee-only’ firms that charge a fee for the services they provide to their clients. Secondly, there are ‘commission-based’ firms where investment managers earn commission on the financial services they offer to their clients. Apart from these, there are other financial advisory companies in Kenya that offer specific services. They are as follows:

Customer Service Representative: Such companies offer financial advice to the customer only if you have an account with them or you have taken a loan from them. These companies help with one time decisions like choosing a certain bank account or a credit card. They will also help in comparing mortgage or loan options as well.

Personal Banker: The personal bankers work at trust companies and banks. The financial advisors of such companies are trained to sell investments and savings bond as well. The personal bankers get a salary from the bank or the organization where they work. This is why there is no direct cost involved for their services.

Mutual Fund Representative: The mutual fund representatives are also financial advisors but they are registered to buy and sell mutual funds on your behalf. The financial advisory companies in Kenya that they work in, are registered as mutual fund dealers. These representatives are mostly paid by the companies whose products they sell.

Investment Representative: The investment representatives are also known as stockbrokers and they are mostly registered to buy and sell different investments including stocks, bonds, mutual funds, closed-end funds and ETFs. They get a commission when they can buy or sell investments.

Insurance Advisor: They are the financial advisors who are trained and licensed for offering advice regarding insurance. Their target is to sell insurance. Some of them also specialize in certain products like property or life insurance. Some of the insurance advisors also sell a wide range of insurance products as well. They make money every time they sell policies.

Sometimes the financial advisory companies charge more than they should. The financial advisory should obtain 1 to 1.25% of the entire evaluation. Whereas they try to settle for 1.5% of the total evaluation. The most sought-after questions regarding financial advisories on the internet start with: “What is the fee structure of the financial advisory companies in Kenya?” “What percentage must be given to a financial advisory company?” Hence, it shows how much people are concerned that a financial advisory company might charge too much. A lot of times, the funds of the clients are abused by different financial advisory companies. This is exactly why you need to consider the most trustworthy financial advisory company in Kenya – Ronalds & Associates. The average breakdown cost of the financial advisor is as follows:

Asset Under Management (AUM): The AUM charges depend on a certain percentage of the overall financial assets that are managed by the financial advisor. The clients with a more affluent flow of income pay more, the ones with low investment pay less.

Fixed Fees: When the fees are fixed, the advisor charges a fixed amount based on the evaluation of the total assets he/she has to manage.

Hourly Fees: This is when the financial advisory companies in Kenya charges the client on an hourly basis. These charges vary, depending on the overall work time.

Annual Fees: Some financial advisories charge an annual rate for the financial assistance provided by them throughout the year.

Hybrid Fees: This kind of fee-structure includes a combination of AUM structure along with the hourly rates.

Comments (4)

  1. Jamen Wanyama
    March 2, 2022

    Can i get an advisor on retirement plan

  2. Amani S
    March 9, 2022

    Good day, Ronalds
    Thank you for the article.
    I am interested in getting an Investment represetative to assist in buying and selling Bonds, Stocks, and ETFs.
    Secondly, wherecan one get Certified Financial Planners in Kenya or can the Investment representative handle Financial Planning of an Individual?

  3. Kevin
    April 16, 2022

    How much do you charge for a financial plan?

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