Non-investment advisory services: Overview, definition, and example
What are non-investment advisory services?
Non-investment advisory services refer to professional services provided by an advisor that do not involve giving recommendations or advice about buying, selling, or managing investments, such as stocks, bonds, or mutual funds. Instead, these services focus on other aspects of business, personal, or financial matters, such as strategic planning, business management, tax advice, legal guidance, or general financial planning without direct investment advice.
Examples of non-investment advisory services include helping businesses with operational strategies, advising individuals on estate planning, or providing consulting on management or marketing practices. These services can be offered by accountants, consultants, attorneys, or other professionals who may not be licensed to provide investment-related advice.
Why are non-investment advisory services important?
Non-investment advisory services are important because they provide valuable guidance and expertise on a wide range of non-investment-related matters. They help individuals and businesses navigate complex issues in areas like law, taxes, operations, and general financial planning. These services enable clients to make informed decisions in areas that are crucial to their success and well-being but don't directly involve managing their investment portfolios.
By relying on non-investment advisory services, individuals and businesses can better manage risks, optimize their resources, and make decisions that positively impact their overall financial health and long-term goals. These services are critical in situations where specialized knowledge is needed but investment advice is not required.
Understanding non-investment advisory services through an example
Imagine you run a small business and need advice on improving your marketing strategy. You hire a marketing consultant who provides guidance on branding, customer outreach, and market positioning. This is an example of non-investment advisory services—while it may improve your business' financial performance, the consultant isn't advising you on buying or selling stocks, mutual funds, or other investments.
In another example, an individual may seek help from an estate planner to set up a will or trust. The estate planner offers guidance on how to distribute assets upon death but doesn’t provide investment recommendations. This is another instance where non-investment advisory services are valuable, helping the client ensure their estate is managed according to their wishes without touching on investment management.
Example of a non-investment advisory services clause
Here’s how a non-investment advisory services clause might appear in a contract or agreement:
“The Advisor shall provide non-investment advisory services to the Client, including but not limited to business strategy, tax planning, and legal consultation. These services shall not include any advice or recommendations regarding investments or securities. The Advisor does not hold a license to provide investment advice and does not offer any such services under this Agreement.”
Conclusion
Non-investment advisory services are critical for individuals and businesses seeking expert advice on a variety of matters outside the realm of investments. These services help clients make informed decisions on topics like business operations, tax strategies, legal planning, and other areas that contribute to their overall success and financial health. By understanding the scope and importance of non-investment advisory services, clients can access the support they need in these areas without expecting or receiving investment-related guidance.
Whether you are running a business or planning your personal finances, these services provide expertise that is essential for making sound, informed decisions in areas outside of direct investment management.
This article contains general legal information and does not contain legal advice. Cobrief is not a law firm or a substitute for an attorney or law firm. The law is complex and changes often. For legal advice, please ask a lawyer.