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What’s The Job Of An Investment Manager?

A person or an organization that is centered in investing in portfolio of security on behalf of their clients is otherwise called as investment manager. This is all done in accordance with the investment objectives and parameters that are defined by clients. Such might be accountable as well for all the activities associated with proper management of the client’s portfolio from selling and buying securities daily to monitoring of portfolio, performance measurement, regulatory and client reporting as well as settlement of transactions.

Whether you believe it or not, an investment manager could range in size from 1 or 2 person offices to some big multidisciplinary companies with offices in multiple countries. In regards to the fees, these are based often on percentage of the client AUM or Assets Under Management.

So to give you a quick example, a person with a 5 million dollar portfolio that’s handled by investment manager who is charging 1.5 percent annually will pay 75,000 in fees.

There are different types of investment manager and it is crucial for investors to have a good understanding of each. Certified Financial Planners or simply CFPs are creating holistic financial plan for investors which take information similar to future cash needs, expense and income into consideration. FA or a Financial Advisor is a broad term to use actually however, this mostly refers to stockbrokers. The portfolio managers or PM are investing directly the investor’s capital together with the goal of achieving high returns of investment.

Investors have to determine what kind of investment manager they need, which likely depends on what stage of financial planning procedure they are currently in. Doing a background check of the professional regulatory qualification of the investment manager, reviewing for any complaints filed before and ensuring that the manager has the experience and skills required is something that investors have to do. Investment managers must be easy to contact to and take specific needs of their clients into account. Due to the reason that financial needs are dynamic, investors must feel comfortable to reach out to their investment manager at short notice as this is the only possible way that service can be customized depending on their needs.

Investment manager’s performance is something that should be evaluated and reviewed. It’s critical for investors to evaluate at least 5 years of investment returns in order to determine the performance of investment manager in different market environments. The fee structure should be considered too when planning to hire such managers to handle your investments and other assets.

Of course, caution have to be exercised all the time to avoid unnecessary things or any troubles while working with the investment manager.