Advantages and disadvantages of investment company's financial management, how to judge whether the investment company is formal?

Investment companies are intermediary structures, not financial institutions. Although you can't directly issue wealth management products, you can pool the funds of individual investors to operate on your behalf, so some investors will choose investment companies to manage their wealth. So what are the advantages and disadvantages of investing in corporate finance?

First, the advantages of financial management of investment companies

1, record preservation and management

Investment companies need to record and save their investments, including capital distribution, dividends and principal redemption, and issue reports regularly.

2. Save transaction costs

Investment companies pool the funds of individual investors and make large-scale investments through project investment, venture capital and project financing. Investment companies conduct large-scale transactions, so they have stronger bargaining power in brokerage fees and commissions, which can effectively reduce transaction costs.

3. Improve investment efficiency.

Investment companies usually have certain full-time securities analysts and securities managers, and through their professional operations, they can have the opportunity to obtain better investment results.

After pooling funds, investment companies can participate in more diverse investment methods than individual investors. Many project investment companies that individual investors can't participate in can do it, and the investment company will reinvest the interest and dividend income to investors.

Second, the investment company's financial management defects

Investment companies have the risk of illegal fund-raising, so investment companies are intermediary companies and generally do not have the qualifications to absorb deposits and issue wealth management products. Moreover, some informal investment companies may use the name of financial institutions to raise funds illegally, which is often hidden and difficult for non-professional investors to identify.

When choosing a wealth management company, investors should fully understand the qualification and scale of the company and carefully choose a platform with excessive advertising power and high expected rate of return.

The above contents about the advantages and disadvantages of financial management of investment companies hope to help everyone. Warm reminder, financial management is risky and investment needs to be cautious.