ASK AN EXPERT: Should I get professional investment help?

The world of investing can seem complex and daunting. Those with cash to spare can be discouraged from starting to invest by the wide range of options available to them. Yet it’s widely accepted  that the single biggest threat to growing your wealth is never starting to invest at all.

Once you’ve decided to put your money to work, you’ll inevitably ponder whether to manage your own investments using a public investment platform, or whether to seek professional help. Expats.cz asked Jan Stránský, Wealth Manager at WOOD & Co., about the pros and cons of professional wealth management.

You should start, Stránský says, by asking yourself the following three questions.

The answers to these questions should determine whether or not professional investment management is right for you.

“The biggest benefit is the fact that you’re working with a professional, whose job it is to follow the financial markets every day and know the products which they offer in detail,” Stránský says. “Any professional offering investment products must pass a regulatory exam by the Czech National Bank in order to legally be able to do so, negating the potential for fraudulent activity.”

There’s no such thing as a free lunch, and this holds true for wealth management. “Fee structures vary depending on the institution or individual you choose to work with and the products you choose to invest in. It’s important to ask your potential advisor before signing up what these expected fees might look like so that you can calculate them into your investment strategy,” Stránský advises. 

“Specific fees to be aware of include entrance fees into investment instruments (usually 0-3%), annual management fees (ranging from 0-2.5%) and early exit fees (often 0-3%).”

It’s vital to honestly evaluate your appetite for putting in the hours necessary to manage your own investments.

“If you don’t have the interest or the time to conduct financial research and follow the markets, I would highly recommend signing up with a wealth manager whose job it is to do this for you,” Stránský explains.

“Passive” investment platforms, such as Portu.cz, allow investors to submit their risk profile which will be algorithmically invested into appropriate asset classes and products. “With this option, you can invest a few hundred or a thousand crowns every month and your money will be automatically invested according to your strategy,” Stránský points out.

“Yet I would recommend signing up with an investment advisor once you have 250,000 CZK or more that you are looking to invest,” he continues. “Do your due diligence to ensure you select a reputable institution and an individual who you feel comfortable communicating with. Having a relationship built on trust with your manager will benefit you in the long run.”

Should you want to reach out to Jan Stránský at WOOD & Company directly for a free consultation, he can be reached at jan.stransky@wood.cz.