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What Does an Investment Manager Do?


July 29, 2020 ( Newswire) An Investment Manager is a banking professional whose job it is, and who gets paid to make investments on behalf of their clients. They choose accounts that fit their client's portfolio in order to help them grow their money and achieve their financial goals.

Investment management is something everyone with assets in the form of stocks and bonds should take advantage of. Their role lets you live your day-to-day life without the worry of moving investments around in the wake of market changes. They are doing it for you, behind the scenes, while you are reaping the benefits of the market growth on your accounts.

Often confused or interchanged with a financial advisor, these roles are actually quite different. An investment manager specializes in handing your investments, while a financial advisor can make suggestions on where to invest but it is not their specialty. One can have both a financial advisor and an investment manager working for them harmoniously.

Who Should Use One?

Now that you have some idea of what the role of an investment manager is, the next question is who should use one? Are they only for the rich who have so many investments they can't do it on their own? The short answer is - everyone with investments can use one!

Of course, if investing is your passion and you are all about watching the markets and seeing how things work, you may not want someone else making moves for you. However, if you are like most people who have their money invested but either don't have the time or enjoyment of keeping track of everything or you aren't confident making investment decisions on your own, an investment manager can do it for you.

How Much Will It Cost?

Investment Managers charge a fee to do their job, so it is imperative that you know what you are getting into before making the jump to hire one. Not all investors are created equal and not all cost the same. Some charge a flat fee while others charge a percentage of your assets that are managed.

What to Expect

When you first sit down with an investment manager, they are going to go over your portfolio, discuss your goals for your investments, and determine your risk tolerance. From there, they put together a plan for your assets to get the best return on investment. These are highly skilled professionals who should be able to point you in the best direction for your money to grow. They act as a fiduciary, which means they are legally required to act in your best interest.

Once your plan is in place and your investments are made, you can sit back and relax and let your investment manager do his or her job.

Everyday an investment manager is briefed on market trends and does their homework on what is going on. If a particular investment is starting to fall, they check on each of their clients who have that investment and weigh the risk of moving it or keeping it, watching also for high tax penalties and other risks. Every client's portfolio is different, so they have to take the time to look at each one.

Additionally, when a particular market is performing high, they look at each of their client's portfolios and risk tolerance to see if they should add that investment to further grow their wealth.

Meeting with Your Advisor

The biggest part of your journey with an investment manager and by far the most important attribute you need to have with them is trust. When you go in to meet with them on a quarterly or yearly basis, you have already trusted them to be acting in your best interest and making sound investments that will help you.

So, what should you expect when you meet with them to discuss your portfolio's performance? The first thing is professionalism. They should have already given you the courtesy of reviewing your portfolio and are ready to discuss any changes that were made and any upcoming changes that they anticipate having to be made.

Next they should discuss any financial changes on your end. Do you have additional funds to invest and how have your goals changed in the past year? This is particularly important because if you do have additional funds to invest or funds that you have grown, your risk tolerance may have also changed. A higher risk tolerance may mean a different strategy of investment for your advisor. Alternatively, if you find yourself in a tighter financial position you may not want to invest as freely, and your risk tolerance may have lowered as you cannot really afford to lose too much at this time. It's a very fluid and complex system.

Getting Started

Now that you understand the role of investment advisors, you can make an educated decision on if using one is right for you and your financial situation.

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