Investment management or finance management are particularly a lot of attention and responsibility requiring areas. It does not matter whether you manage your money whether corporate funds, in any case, it is important that the use of those funds would be as possible efficient and professional. Generally, all financial assets are not easily to accrue, and it is very important not to only save them properly, but also to employ those assets correctly.
Maybe it is true, that no investment manager will care about your money better than you would. Of course, the fact that you would care of your money in the best way could be argued, because you can face a lack of knowledge. But perhaps it is true, that you are the one who will try to do the best what possible, when other investment (finance) managers would not in some cases.
However, investment management is not such a simple and easy thing. If personal finance can be understandable almost for everyone who wishes it, the investment management or corporate finance requires quite a lot of financial sophistication, knowledge and experience.
Why finance and investment management is a complex? Well it is really not a rocket science, and at first glance, it may look not too difficult. For some it may seem easy, because they do not see the whole picture.
It is really not difficult to manage investments unskillfully - but if you want to do it properly, you need to see and understand the whole view of what is going on financial markets, because if you will not account all the circumstances, your investment decisions will be taken out of context, limited and not the most efficient. All the sane rules apply for investment or finance manager.
How to choose the best Investment Manager
What to pay attention when choosing the right investment manager:
- It may sound banal, but experience is always important. How long investment manager has been working with financial markets, what were the main areas of activity. It is more important experience of the exact person who will care of your investments, than the whole investment company.
- Another, not less important thing is management fees. Generally, asset based management fee is applied for investment management, which is some percentage of the invested capital. Also a success fee can be applied, which is based on return from investment. There may be other management fees, as well as hidden. Be sure to compare all fees to other financial or investment managers. No matter how good investment manager is, it is not a justified reason to pay much higher fee for that, because it certainly does not guarantee a better investing results in the future.
- Find out what investment instruments will be used for investing: the best choice for the investor (very rear in practice), or the best choice for the investment manager or his company (the investing products that are the most charged by all kind of fees).
- It is important to make sure about investment managers sincerity: is he really holds to the risk level that was planned? If he want to make more money from you he could choose investments of higher risk, and you would notice it only when already would be too late.
- Choose practices, not theorists investment managers. Theorist can often seem smarter and more educated, but text books are not enough to understand and feel the financial markets well.
- And remember - nothing for free, and stingy always pays twice…
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