Your Portfolio: Consider a money manager for your portfolio

So far, you’ve developed a successful investment strategy that has helped you reach many of your financial goals. While you’ve been pleased with your portfolio’s performance over the years, you may find yourself needing the advice and care that a professional can provide. In order to apply more sophisticated investment techniques — such as risk management and style selection — consider the expertise of a money manager.

A money manager will not only be able to manage your portfolio with their extensive knowledge of investment management, but they will also offer personalization and convenience. Your portfolio will be customized to fit your financial objectives while you retain ownership of the individual securities in your portfolio. A money manager will also be able to address your individual needs such as tax planning and socially responsible investing.

Once you decide to invest with a money manager, you must face the most challenging part of the equation — choosing from the thousands of managers available to help satisfy your specific needs and objectives. In order to thoroughly research and identify the right one for your situation, you will want to take into account management experience, style considerations, investment discipline, track record and client service philosophy. You may also want to consider a manager search service that may perform the following steps for you.

Management experience: When looking for a money management firm, be sure to research the experience and capabilities of the organization’s key decision makers and review the combined experience of the senior investment managers, the tenure of the current management team and the firm’s longevity. Evaluating a firm’s credibility should be the first step in the assessment process. If there are some questionable links tied to the core leadership of the firm, dig deeper or move on.

Style considerations: It is important that a money manager follow the established investment styles and doesn’t take unnecessary risk compared to other managers with similar investment styles. This is also important when you consider your individual portfolio objectives. Are they a compatible choice?

Investment discipline: The manager you select should have a defined investment philosophy and approach to managing portfolios, as well as a process for buying and selling securities compatible with that investment style. You’ll also want to ask yourself if their philosophy fits with your goals.

Track record: Don’t forget to evaluate a manager’s performance relative to major market indexes and his or her peer group in both up and down markets. Be sure that there is consistency over the short term and long term and that performance is relative to the level of risk.

Client service: In order to ensure superior customer service, take a look at the size and growth of the organization you’re considering working with and also the quality and timeliness of its client communications. You want your assets to be taken seriously in a timely manner.

Choosing an appropriate money manager for your portfolio is an important job, so you’ll want to do an in-depth study of all the available options. For more information, you can contact your financial consultant who will be able to assist you in your search. They will be able to help identify your portfolio objectives and a strategy to help you meet them, conduct a manager search and provide ongoing due diligence of the manager and review your portfolio’s performance.


This article is by Christopher Facka, CFP, Financial Consultant with A.G. Edwards. A.G. Edwards is a division of Wachovia Securities, LLC. Member SIPC.

© 2008 All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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