Which energy investment advisor is right for you?
Financial advisors have long been the darling of the energy market, but as new technologies and innovations have brought investment opportunities to the market, so too have concerns about the financial risk of the sector.
Now, a new study from research firm PPP says there’s an emerging group of energy investors that’s taking a more cautious approach to investing in the sector, and that’s the energy investment advisors (EAs).
While there are some similarities between the two groups, PPP said the key difference is that PPP’s EAs are “very sophisticated”, “very well-regarded” and “have a lot of expertise in the energy sector”.
According to the PPP survey, there are more than 30,000 energy investment advisers in Australia, with about one in five managing more than $500,000.
“It’s a very high proportion of those people who are actively engaged in the industry,” PPP senior managing director, Michael Kelly, told News.
“They’re also very well-respected, very well respected by the industry, and they’re also fairly well-educated.”
The PPP report looked at the roles of energy investment providers (EIs), who offer financial advice to clients about investing in their portfolios, and other energy sectors such as gas, electricity and renewables.
PPP surveyed energy investment companies (EICs) in the financial services, banking, insurance and real estate sectors, which collectively comprise about 10 per cent of the total number of EAs.
“The energy sector is really a complex market,” Kelly said.
He said the study found that about 60 per cent were “well-educated, highly-paid” and had a range of expertise. “
I think that’s one of the reasons why we have a very sophisticated group of people doing the work of doing it.”
He said the study found that about 60 per cent were “well-educated, highly-paid” and had a range of expertise.
“What’s really striking to me is the breadth of their understanding of the industry and the industry they’re managing,” Kelly told News Corp Australia.
“That’s one thing I think we’ve got to focus on, is that the majority of them are very well trained and highly-respected.”
PPP researchers also looked at how different types and roles of EIs performed in particular sectors.
“For example, the finance EIs tend to be a little bit more cautious in terms the type of investment they’re doing, and it’s more about providing a reasonable return for their clients,” Kelly explained.
“One thing that we’ve also found is that for the energy EIs, there’s more expertise in other sectors.” “
A recent study found energy EAs earn an average of $17,800 more per year than other investors in the same industry. “
One thing that we’ve also found is that for the energy EIs, there’s more expertise in other sectors.”
A recent study found energy EAs earn an average of $17,800 more per year than other investors in the same industry.
That’s because EAs get access to more data and the opportunity to do more research before they make a decision.
Kelly said the energy industry was “really interesting” because it “has a lot to do with the way that you think about the world”.
“You can’t get into the energy markets without thinking about the environment, you can’t understand the environment without thinking of the economy,” he said.