Investment advisors- A key role player in the economic development:

Investment advisor are those companies or consultants who advises the various governments (state & Central) & various companies in their present and future

Investment plans and takes some fees from their clients for rendering their services.

TYPES OF INVESTMENT ADVISORS:

Depending upon the level of the investments by the clients, there are two types of

Investment advisors-

1)Strategic Investment advisor

2)Non-Strategic Investment Advisors

1)Strategic Investment Advisors: Are those who advise the Big Companies or the Governments in their big projects investment plans.

2)Non-Strategic Investment Advisors: are those who advises the Companies regarding their small or non-core projects.

ROLE OF THE INVESTMENT ADVISORS:

In the developing and underdeveloped countries, resources are very scarce and the governments in these countries has to initiate its investment plans very

carefully. Since the governments has to run the states on the limited resources & infrastructural setup, it needs the help of such organizations or groups who are equipped with the better setup and

trained manpower; in its various Investment advisor plans. This is what an investment advisor does. In India, role of the investment advisors have increased after the post liberalization period. Today various investment advisors,like ABC Consultants PVT. Ltd., Mckinsey, J.P. Morgan & Co. etc. are advising the

various states as well as the Central Government in their various programmes like HR,rural projects, power, health, housing & Infrastructural projects. Central Government too has its own such organization Hospital Services Consultancy India Ltd.(HSCIC) & MECON who advises the government regarding the hospital projects and Services & the Engineering Projects respectively.

AREAS COVERED:

The areas covered by the investment advisors are very large. These are:

1)Accounting, Payroll, Time Office services,

2)General maintenance works,

3)Engineering projects, mining works, Drilling works.

4)Legal & Administrative Services,

5)Airports, Ports, Docks, Highways projects and Maintenance,

6)Drinking Water Projects, Health & Sanitation works,

7)Primary and Higher education services,

8)Power projects (Hydro & Hydel),

9)Housing projects,

10)Irrigation projects etc.

WORKING METHODOLOGY:

These Investment advisor advise their client about the feasibility of the proposed projects. First they get the project details from their clients and then they analyses the data scientifically. Lots of scientific methods nowadays are available i.e., Mathematical models, Regresion Analysis, Interpolation & extrapolation techniques.Usually lots of factors are considered for preparing the project feasibility reports.

They are:

1)Present Market conditions,

2)Demand & Supply positions,

3)Projects Present & future prospects,

4)Clients financial positions

5)Availability of necessary inputs i.e., raw materials for setting of production units,

6)Projects overrun, Manpower problems etc.

The present market conditions are very much important for deciding the prospects of the projects or services. For example, for setting up of Telecom units in North East,the telecom company who undertakes such projects must be aware of the numbers of the competitors present in that place. The more the competitors are ,the less will be the

Profitability of the company and the company will have to take numerous measures for Capturing market shares for their products or services.

The Demand & Supply positions are also not less important in determining the fate of the

Company. If the demand for the goods or services is less then obviously the production & consequently supply of the products or services will be affected. That is why the Tea Companies or Soap & Detergent Companies first makes the survey of the particular

Region where it intends to launch their goods or services or set up projects. Depending upon the feedbacks of such surveys only, they decide to take further steps.

The Project s present & future prospects are also important. If any company or government finds that any projects which is not going to be fruitful for them

Due to various present & future factors i.e., poor infrastructural setup, law & order problems, thin purchasing power of the people in the particular region,presence of lots of competitors in the market ,poor demand of the goods or

services in the future due to the technological advancement etc. In such conditions, the company or the government will be forced to quit such projects.

The factor which is most important in determining the fate of any project is the Client s financial positions. If the client is financially sound enough to withstand all the expenses incurred for starting & commissioning the projects including the projects overrun, labour problems(if any), possible losses due to poor or less demand of the goods or services ; then obviously such company will not hesitate to invest in

Such project.

Availability of the inputs is also very important for running the any projects. if a Steel Giant intends to setup a steel unit in a area then first , it must ensure the easy & sufficient availability of the raw materials i.e., coal, power, water, limestone, Pig iron etc. in that area.

The last item is projects overrun i.e., extra costs incurred due to delay in the finishing of the Project undertaken. In India, project or cost overrun is very familiar term. Many of the big projects which is undertaken by the government gets delayed due to the administrative bottlenecks, labour problems, technical problems etc. The result is, some of the big power projects in India (for example) are completed more than the double of the estimated costs.

CONCLUSION:

There is no doubt, detailed preview & study is necessary for any company or the government before setting of any project or unit. The investment advisors are therefore, appointed for such task. Sometimes for restructuring of any organization

too, investment advisors are appointed. Today, in the present prevailing uncertain economic & business conditions & due to the financial limitation, it becomes utmost important for any Company or the government to hire the investment or financial

advisors who advises their respective clients regarding their investment plans & business expansion plans. The importance of the investment advisors also increases for the company or conglomerate who wants to enter into the new business field. It is also necessary to have an investment advisor for any client to cut off unwanted administrative costs & for surviving in the competitive market.