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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 for all the associated activities with proper management of the client’s portfolio from selling and buying securities on a daily basis to monitoring of portfolio, performance measurement, regulatory and client reporting as well as settlement of transactions.

As a matter of fact, investment manager range in size from 1 or 2 person offices to big multidisciplinary companies with offices in various countries. The fees for such are based generally 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. An FA or Financial Advisor is relatively a broad term to use however, it typically refers to stockbrokers. Portfolio managers or PM are directly investing the investor’s capital with the goal of providing 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. It is essential that you do a background check of professional regulatory qualification of the investment manager, review any complaints that were filed before and ensure that the manager has skills and experience required. It is important for investment managers to be contacted easily and take specific needs of their clients in mind. As financial needs are so dynamic, investors should feel more comfortable in reaching out to their investment manager at short notice because this is the only way that service could be customized according to their needs.

The performance of investment manager ought to be evaluated and reviewed. It is critical for the investors to assess at least 5 years of investment returns to be able to determine the performance of investment manager in different market environments. The fee structures must be considered as well when considering to hire such managers to handle your investments and other assets.

While working with an investment manager, caution must be exercised at all time.

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