An investment consultant is someone who advises client on what to invest their money in. Usually, the investment consultant establishes a long-term relationship with the client, getting to know the state of their finances, when and in what circumstances they are likely to need to proceeds of their investment, and feels out their attitude towards risk. Knowing all this, the consultant is able to decide what investment vehicles are most appropriate for the client’s funds, and usually has the responsibility of actually executing the investment decisions, moving the client’s money around.

Usually, investment consultants are remunerated on a percentage basis relative to the transaction value of any sales or purchases that are made in the client’s investment portfolio. This practice has led to some criticism over the years from those who argue that the interests of the client and the interests of the consultant diverge significantly. Since investment consultants are rewarded by initiating more transactions, some believe this can operate to the client’s disadvantage, with consultants having an incentive to buy and sell investments needlessly. As a result of this critique, some investment consultants now operate on an hourly fee basis instead, to remove any negative incentives from the picture.