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How Much Money Should You Trust a New Investment Manager With?

by Caldwell Trust

An investment fund manager is an individual or entity responsible for implementing your fund's investing strategy as well as managing your portfolio. As an investor, it is imperative that you fully review and grasp the investment style of potential fund managers before investing your money. Investing in a fund has many benefits, but trust must be the basis of the undertaking.

The investment management team is responsible for decision-making regarding how your fund is used, hence the need for a thorough evaluation of whom to trust your hard-earned money with. A responsible investment manager provides investors with peace of mind and assurance that their money is in safe hands.

Market forces have a lot of influence on your fund's performance but a skilled investment manager knows how to ride the tide. This kind of manager is known as an alpha manager, while investment managers who take a backseat approach are known as passive managers. That said, the amount of money you invest in a new investment manager should be driven by these 4 major factors:

1. Core Values

Finding out your investment manager's core values goes a long way in determining how much money you can invest with them. In most cases, you can land a good investment manager through referrals, although there are other ways to determine the investment manager's core values.

An investment manager with integrity should easily recite their values to you. A manager who sells you a financial service based on commission, regardless of whether it suits you, isn't an ideal choice. A fund manager with integrity has their core values aligned to yours rather than just being committed to commissions and is a trustworthy investment manager.

2. Expertise Level

It is unwise to invest your hard-earned money without putting into consideration the investment manager's level of expertise. A trial-and-error kind of manager will see your money go down the drain and ruin your portfolio.

It is quite reassuring when your investment manager's education, certifications, as well as the number of advanced degrees are not questionable. Ideally, choose an investment manager who hasn't had negative references or had scrapes with regulatory authorities, as well as a history of misconduct.

3. Payment Plan

You must find out whether your investment manager is compensated for transactions or investment advice. Your money has not come by easily and therefore you should be quite clear about how much money you are paying for their service.

Does the investment manager charge an annual fee? How are you paying for their services? Is it every time you use their service or do they deduct a fee from your assets?  Such questions determine how much of your hard-earned money you can entrust to an investment manager.

4. The Quality of Service

An investor needs to be kept apprised of any new developments which may affect their portfolio. These include things like a shakeup at a big company, a change in the price of stock, or an acquisition in an industry related to the investor's portfolio. A lack of communication could cost investors money. Thus, you should only put your money where the quality of service is assured.

We Can Help

How your money is used goes a long way in determining how much it grows. Financial integrity is a treasure to behold when it comes to investments and cannot be substituted for anything. Finding a competent and experienced investment manager is a wonderful beginning to a life of financial bliss.

At Caldwell Trust, we are dedicated to seeing your money grow by offering our expertise in estate planning, investment management services, and retirement planning services. We believe that when you work with us it is not just a transaction, but a relationship. Contact us now for more information.


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