The investment advisory market is one of the fastest growing markets today. More and more people are looking for investment advisors to invest and earn extra income. Today, this market is hotter than ever and generates countless professional opportunities. For both clients and service providers, this atypical movement within the investment advisory market is very interesting. New opportunities are created and securities are becoming increasingly diversified – an investment catalog that is unparalleled worldwide.
Why is the Investment Advisory Market Booming?
The investment advisory market is currently booming for a number of reasons, the main one being the increase in general interest and the possibility of investments as an extra source of income. Other reasons for its growth include:
- Financial education of the population;
- Digitalization and technology;
- Growth of companies and fintechs;
- Regulation and reliability.
These elements are part of the real reason why the investment advisory market has grown. However, none of them can be defined as the sole or even the main reason, since the growth of the market is a result of the sum of all of them and their complex interactions. What we can say is that this market is increasingly active and diversified. Nowadays, investment options with crypto in the form of Bitcoin ETFs, Ethereum ETFs and other digital currencies are already widely accepted. This is further proof of how mature the market is and we can see more by analyzing the points below:
Technology
One of the main factors responsible for the growth of the investment advisory market is technology. It is responsible for bringing tokenized funds to the catalog of services provided by investment advisors, for example. This is undoubtedly one of the most sought-after assets in the market today. Today, VASPs are essential entities in the investment advisory market, and this is yet another reflection of technology and the digitalization of companies, especially fintechs. Cryptocurrencies are also the result of technology, and the options go beyond the major currencies, as shown by DREX, a Brazilian digital currency. The ease of hiring a professional in the area is another conclusion of how technology helps the investment market. Through digital resources, any company or individual can have access to an investment advisor, search for the best price, and be able to hire a good service.
Regulatory Changes
The regulation of the investment market contributed significantly to the growth of the sector. One of the most sensitive points in the investment market is that its clients had little trust in the services of their advisors. The lack of trust led many to give up before hiring. In Brazil, one of the major advances in the market was the regulatory framework for investment advisors created in 2023. In this framework, the CVM – Securities and Exchange Commission – defined some rules that would be applied to all investment advisors. Some important points that were detailed include:
- Non-exclusive service;
- Flexibility as a service provider;
- Transparency for the investor;
- Creation of directorates responsible for the advisor;
- Various tax details regarding the provision of services.
As expected, defining rules and regulations that ensure greater trust in all these topics has had a considerable effect on the market. As a result, investment advisory services have become more sought after and much more respectable in Brazil.
Evolving Investor Needs
There has been an evolution and escalation in the needs that investors have had when it comes to obtaining more securities. The market, as we have mentioned, has been seriously impacted by technological innovations. The diversity of securities, as well as the internal complexity of how each one works, has led investors to seek advisors. The investment advisory market exists for this purpose, to offer good, qualified professionals and investment specialists so that they can assist their investor clients. Therefore, the more complex the needs of investors, the greater the demand and need for investment advisors.
New Possibilities Brought by Tokenization
Tokenization has played a very important role in the investment market. It is estimated that the market has currently moved around US$300 billion, a value that exceeds 1 trillion reais. At first, tokens caused some distrust in the market, but today they are already one of its main assets. In fact, asset tokenization is a broad concept and can relate to several different elements. There are many securities originating from blockchain, which makes this a vast universe that integrates into the investment advisory market. Some assets include:
- NFTs;
- Tokenized securities;
- Media content;
- Images;
- Music;
- Cryptocurrencies.
There are also several other assets that can be purchased and traded quite easily. The practicality that tokenization brings is also noteworthy, as it is a sector that offers liquidity and maintains a captive audience. Without a doubt, the trading of digital assets represents a huge boost to the market.
Is There Still Room to Grow in the Investment Advisory Market?
There is plenty of room for growth in the investment advisory market, especially when we analyze the technological possibilities that are still being launched for the sector. The aforementioned tokenization is one of those elements that never stops growing and, according to reports, could reach 3 trillion by the next decade. Tools and resources to deal with the market also contribute to this growth. We can mention here Whitelabel, a BLOCKBR platform designed both for small companies to take advantage of tokenization and raise funds through tokenized securities, and for investors and their advisors to negotiate. There is still a lot to take advantage of in this market, especially among the tokenized possibilities. Be sure to take advantage of these resources and benefits, whether you are an entrepreneur who needs capital, an advisor who wants to provide their services in the market, or even an investor.
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