Investment Advisory
Definition
Investment advisory consists of providing personalized recommendations on financial instruments or asset allocation strategies, based on a client’s profile, objectives, and constraints. In an environment characterized by market volatility, changing interest rates, and inflation, it is an essential lever for making informed decisions aligned with a long-term wealth strategy.
In private banking, investment advice is part of a long-term relationship, built on financial expertise, a comprehensive understanding of the client’s wealth, and ongoing portfolio monitoring.
Definition of Investment Advisory
Investment advisory refers to recommending financial solutions tailored to a client’s specific situation, whether an individual, a business leader, or a wealthy family. It may cover direct securities, mutual funds, ETFs, structured products, or unlisted assets, and may also include SRI/ESG strategies.
This advisory process takes into account financial knowledge, risk profile, investment horizon, wealth objectives, as well as tax, legal, and liquidity constraints specific to each investor.
The Regulatory Framework for Investment Advisory in France
In France, investment advisory is strictly governed by the MiFID II directive, which aims to strengthen investor protection and financial market transparency. This framework notably requires:
an assessment of suitability between the proposed recommendations and the client’s profile,
clear information on costs, risks, and product characteristics,
product governance rules,
and formalized traceability of recommendations.
This regulatory framework forms a key foundation of trust between the client and the advisor.
The Investment Advisory Process
Investment advisory is based on the following steps:
A detailed understanding of the client’s situation (family, professional, financial, budget, objectives, preferences, experience, etc.)
The definition of a medium- to long-term strategic asset allocation
The development of a tactical allocation that reflects macroeconomic trends and incorporates market views
Finally, the selection of products and services
The Role of Investment Advisory in Private Banking
In private banking, investment advisory follows a structured and professional approach, including:
Internal or external investment research,
Conviction lists and selected investment universes,
In-depth due diligence on funds and investment vehicles,
Regular portfolio monitoring (reports, alerts, tactical reviews).
Advice is adjusted according to the macroeconomic environment, market developments, interest rates, and inflation.
Investment Advisory Asset Classes
Investment advice may cover a wide range of solutions integrated within various wealth wrappers:
Type of Asset | Examples |
|---|---|
Listed assets | Equities, bonds, ETFs, mutual funds |
Structured solutions | Capital-protected or conditional products |
Responsible investment | SRI, ESG, sustainable themes |
Private assets | Private equity, private debt, real estate |
The selection of investment products takes into account the investment universe of each chosen wrapper (life insurance, PEA, securities account) as well as the investment horizon.