Choosing an investment manager can feel like a daunting task. You have to consider their experience and personal values, as well as your comfort level when it comes to asking questions about your money. Most importantly, choosing an investment manager comes down to trust. There are some key aspects to consider when selecting an investment manager for your investment needs.
Your Needs & Goals
The biggest thing to consider before you start researching investment managers is what your goals and needs are. If you’re looking for someone to provide you with advice and a comprehensive plan and budget, look for an experienced Certified Financial Planner (CFP). If you need someone to manage more substantial asset investment when you have more asset value, look for specialized investment managers or a portfolio manager (PM). A portfolio manager focuses on investment securities and generally deals with more traditional methods of investing. Specialized investment managers, however, work in specific industries and tend to deal with alternative investment types, such as mortgage investing.
Who Are They?
Once you know what you’re looking for and what you value in terms of investment and money matters, it’s time to look at who the potential investment managers are. One of the top things to consider here is how long they’ve been with a particular company. The last thing you want is to find an investment manager whom you’re comfortable with, only for them to move on to another firm or a different city entirely.
Next on the list is checking their industry knowledge. How long have they been working with investments, and what other skill sets do they have that set them apart? At Cooper Pacific, our team has a wealth of experience related to the real estate and construction industries. It’s with this knowledge that we make our investment strategies. An investment manager who has relevant additional industry experience will be better qualified to make decisions based on a more informed picture related to the specific industry.
Do they educate their clients? Look for an investment manager who offers clear education on the many topics related to investing. If someone scares you into blindly trusting them by using industry terminology, they’re likely to be the wrong fit. You should be able to understand the reports they give you and the decisions they make with your money.
A significant thing to consider is what their motivation is. Are your investment interests what motivates them, or is it the management fee? Try searching for an investment manager who is passionate about investing and keen to learn more about how to leverage market inefficiencies others may overlook. You want someone who is driven to help their clients, not just someone motivated to receive their fees and provide average returns to their clients.
Look at Their Fees
Speaking of fees, you should have a firm understanding of an investment manager’s fees before choosing one. It’s not enough to have a strong understanding of your goals and what an investment manager is capable of doing to help achieve them. You should find out what they will have to gain from your investments. It’s one thing to be able to understand reports and the importance of diversification in an investment portfolio. However, if you don’t know where the money you’re earning is going, you could be paying out more than necessary in fees.
Remember: big fees aren’t a bad thing if an investment manager can and is spurred on to provide returns that justify their fees. But don’t allow a manager to charge hefty fees you don’t understand while leaving you with minimal returns.
How You Feel Speaking With Them
The crucial decider should be how you feel discussing your finances with them. Do you trust their motivation? Do you feel comfortable admitting when you don’t understand them? Do you feel like they’re readily available to you? Do you find it difficult to get in touch with them when you have concerns? These are all valid and essential things to consider before deciding on an investment manager.
We’ve spoken before about what to look for in a mortgage investment corporation on a more technical level. It’s not so different when deciding on an investment manager. You should put these same practices into play. It’s vital to understand the terms and conditions associated with an investment manager as well as their previous experience and portfolio returns. What is also an essential part of the decision-making process is getting to know who they are and how you can, and will, work together.
If you’re looking for a specialized investment manager in real estate and construction to diversify your portfolio, we’re here to help. Cooper Pacific brings years of industry experience to the table as well as a passion and a keen interest in the mortgage investment industry. Get in touch with Jordan on our team today to set up a time to talk.