Investment management is a professional service which helps individuals and corporate entities handle their various securities holdings while trying to achieve specific financial goals through investment and savings. Investment management can refer to both individualized management of securities or collective management of securities for cooperative financial instruments. Cooperative financial instruments can include mutual funds, exchange traded funds, or even some large pension funds.
Investment management professionals may specialize in some of the following areas:
1. Managers of collective or cooperative instruments.
2. Advisory or discretionary investment management, who typically work with high net worth individuals, providing specific advice for their large portfolios.
3. Commercial investment management professionals, who work for large banks, helping both corporate and private clients manage their investment funds.
Understanding the process of investment management can greatly enhance how you select an investment manager that is right for you. The following is a breakdown of how an investment manager can help the management of your assets:
1. Determining investment objectives and restrictions. Your investment manager will work with you to understand what you want want to achieve through your investments and the restrictions you may face.
2. Your investment manager will then work with you to determine what mix of financial instruments you should invest in, particularly to diversify your holdings to protect and make best use of your finances. This step can vary greatly depending on the investing philosophy of the manager and the risks you are willing to make.
3. The investment manager will then actively seek out the stocks, bonds, and derivatives that compliment your investment strategy. Securities can fluctuate greatly, so the type of investments may change depending when you are entering the market or the potential changes that may occur.
4. Once your plan is set and the proper instruments chosen, the investment manager will actively put your portfolio into effect, purchasing and trading for the correct mix of securities needed to create your investment portfolio.
5. From time to time, your portfolio will need to be modified, expanded, or contracted depending on changes in the market or changes in your financial situation.
When searching for investment management firms, it is important that you find one that has professionals that can meet your needs and has experience with other similar clients.
1. Look for investment management firms in banking listings, which can be found through banking institutions or even on the internet.
2. Seek recommendations from similarly situated people or corporations who have used investment managers in the past. Listen intently on the type of service they provide and whether they were happy with the service provided.
3. Check with regulatory agencies, such as the SEC or FINRA, to determine if an investment manager has any complaints or investigations against them. Avoid any investment management firm that has acted improperly in the past.
