Investment Advisor Compass | Why Choose a Fund Investment Advisor? Isn't It Better to Buy on Your Own?

(Source: Shanghai Stock Exchange ETF Home)

2026

To better serve residents’ wealth management needs, the Shanghai Stock Exchange has launched the “Investment Advisor Compass” column, gathering professional insights from well-known institutions and continuously sharing industry fund advisory practices. Here, we will explain the connotations of advisory services in a more relaxed and understandable way, break down asset allocation logic, discuss the significance of investment companionship, and explore professional and inclusive wealth management paths with you. On the investment journey, let the Investment Advisor Compass guide you.

Source: Contribution by Franklin Templeton Fund

1. How do you usually buy funds?

With societal development, people’s division of labor is becoming more refined. Besides familiar professions like doctors for healthcare, lawyers for legal issues, and trainers for fitness, more specialized careers have emerged, such as the recently popular organizing and storage specialists. A few years ago, who would have thought that even daily household clothing organization would require paid services? Storage specialists charge by the hour, ranging from 200 to 400 yuan per hour. Hiring someone to tidy up clothes might cost over a thousand yuan. Of course, consumers who have experienced storage services also say this service is “worth it.”

As the saying goes, specialization is key—leave professional tasks to the professionals.

2. Choose professionals or trust yourself?

Isn’t it supposed to be that specialization is key?

We all understand the principle, but in investment and wealth management, it’s really easier said than done.

Actually, it’s not entirely our fault as retail investors; there are objective reasons behind this.

Having your own dedicated investment advisor currently requires at least a 5 million yuan threshold in China’s private banking, which makes ordinary people hesitate.

But questions like “I don’t understand investing,” “How to choose funds?”, “When to buy? When to sell?”, “How long should I hold the fund?”, “Why do I not make money even though the fund’s returns are good?” are real concerns that bother us.

Let’s first look at how the most developed global fund market—the United States—participates in fund investing.

Most Americans hire professionals like brokers, investment advisors, or financial planners to guide their fund investments.

According to data from the Investment Company Institute (ICI), 77% of American households and individuals use third-party investment advisory services for fund allocation, while only 13% buy funds directly from fund companies or sales channels.

In other words, the vast majority of American retail investors purchase funds through fund advisors.

Overseas, fund advisory services are well-established and are the main way the general public invests in funds. Compared to domestic investors, fund advisory is a relatively new phenomenon in China, only about 1-2 years old, and many are not familiar with it.

Someone might ask, are Americans with nearly a personal fund advisor per person particularly wealthy?

Here’s some data for reference: as of the end of 2019, the SEC (U.S. Securities and Exchange Commission) registered over 43 million clients for advisory services.

In terms of client composition, advisory clients mainly fall into three categories: individual clients (high-net-worth and non-high-net-worth), fund pool clients (such as private equity funds, registered investment companies), and institutional clients (banks, insurance companies, charitable organizations, pension plans).

Regarding client numbers, individual clients are the main service target of U.S. fund advisory businesses, accounting for 94.6% of total clients. Most of these are non-high-net-worth individuals, who make up 82.2% of all clients and 87.0% of individual clients. This means the long-tail customer group is the main force participating in fund advisory services, and fund investment advisory is not exclusive to high-net-worth clients.

3. What can fund advisory do for me?

Since fund advisory is a service for the general public, it must be accessible and down-to-earth.

Convenience, peace of mind, and affordability are the main features of fund advisory, making it resemble a popular, affordable restaurant.

Although fund advisory services are imported, domestic fund advisory largely follows the original characteristics of overseas advisory services, targeting more mainstream consumers. The initial regulatory purpose was to guide retail investors toward more scientific investing and better investment experiences.