Development of Independent Financial Advice to Private Investors: Analysis of Russian and Foreign Experience

Attracting household finances to the country’s economy and competent management of personal finances are among the tasks of the state. The issues of rational financial planning and minimizing the risks of loss of personal wealth are acute for private investors. Independent Wealth Management Advisory is an intermediary activity between financial institutions and households. Independent advice to private investors is one of the tools in solving the problems of the state and investors’ issues. As a result of the analysis of the activities of an investment adviser in Russia and abroad, using the example of the United States and Great Britain, it was revealed that experience is adopted from other countries, but in Russia it is not fully implemented. In Russia, the main part of independent advisers is in the ‘gray zone’, their activities are not regulated at the level of law and self-regulatory organizations in the financial sector. Therefore, the author’s approach is to propose to separate the activities of investment advisers, which are enshrined in law and independent financial advisers, who currently operate without any regulation. The regulatory and training function for independent financial advisers should be entrusted to SROs. Firstly, separating the activities of independent financial advisors allows them to provide educational services to a wide range of people and the provision of consulting services in private without providing investment recommendations, but with the definition of the risk profile of the investor. Introduce licensing for various types of activities. Secondly, it is key to determine the principles for charging the services of independent financial advisors. The proposed steps will make the provision of independent household financial advisory services transparent and understandable to regulators, investors and those who operate or plan to choose as a future profession. This will serve to attract private capital to the financial market, reduce the risk of loss of wealth, move the existing advisers out of the ‘gray zone’, and make personal finance advisers an integral part of the financial market infrastructure.