Choosing a Discretionary Asset Manager
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For most busy individuals, whether investing for themselves or on behalf of someone else such as your mother or father, it is wise to engage the services of a professional investment manager. This isn’t necessarily because they know about the investment world than you although it is likely that this is the case, but because these people not only have the time to spend keeping up-to-date with every aspect that will effect your investment but more importantly have the support of staff who work full-time analysing companies and identifying opportunities. They will also have the benefit of hearing about and considering the effect of any deals or changes that may effect a companies share price.
As an investor the first part would obviously be to decide the type of management style best suited to your circumstances, requirements and investing goals. In some respects, this can be impacted significantly by the actual sum that you will be investing - the value of the investment can vary as do the minimums depending on the investment choice but it is very rare that asset management firms will deal with small amounts. A discretionary fund manager makes daily decisions about asset allocation and stock selection and implements them without prior reference, although any portfolio changes will be made within a framework agreed at the start of the arrangement and regularly reviewed. The client will receive contract notes detailing each transaction and reports from the manager at regular intervals, both in writing and either in meetings or by telephone.
It can be difficult selecting the right investments for the uninitiated but for those of us who have neither the time nor the inclination to monitor the markets and select our own investments, using the services of a discretionary portfolio management specialist can significantly reduce the investment headache. This kind of service is for clients who want to hand over the responsibility for managing investments to an expert. He or she will begin by sitting down with you to work out what you want to achieve from your investments, before constructing a portfolio to suit your requirements. Your investment manager then makes all the day-to-day decisions on your behalf, keeping inside a framework agreed with you at the outset.
Depending on your particular requirements, your portfolio will typically include a combination of equities (individual company shares), managed funds (unit trusts, investment trusts and open ended investment companies), fixed interest securities (government gilts and corporate bonds), property funds and cash. In addition to these “core” investment categories, some managers also include “alternative investments” such as hedge funds and AIM (Alternative Investment Market) stocks. For smaller portfolios, or those where the client prefers the additional diversification, investment may be exclusively through managed funds.
As an investor the first part would obviously be to decide the type of management style best suited to your circumstances, requirements and investing goals. In some respects, this can be impacted significantly by the actual sum that you will be investing - the value of the investment can vary as do the minimums depending on the investment choice but it is very rare that asset management firms will deal with small amounts. A discretionary fund manager makes daily decisions about asset allocation and stock selection and implements them without prior reference, although any portfolio changes will be made within a framework agreed at the start of the arrangement and regularly reviewed. The client will receive contract notes detailing each transaction and reports from the manager at regular intervals, both in writing and either in meetings or by telephone.
It can be difficult selecting the right investments for the uninitiated but for those of us who have neither the time nor the inclination to monitor the markets and select our own investments, using the services of a discretionary portfolio management specialist can significantly reduce the investment headache. This kind of service is for clients who want to hand over the responsibility for managing investments to an expert. He or she will begin by sitting down with you to work out what you want to achieve from your investments, before constructing a portfolio to suit your requirements. Your investment manager then makes all the day-to-day decisions on your behalf, keeping inside a framework agreed with you at the outset.
Depending on your particular requirements, your portfolio will typically include a combination of equities (individual company shares), managed funds (unit trusts, investment trusts and open ended investment companies), fixed interest securities (government gilts and corporate bonds), property funds and cash. In addition to these “core” investment categories, some managers also include “alternative investments” such as hedge funds and AIM (Alternative Investment Market) stocks. For smaller portfolios, or those where the client prefers the additional diversification, investment may be exclusively through managed funds.
