What’s a money manager?

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Money managers handle investment portfolios for individuals or businesses, customizing each portfolio to meet the client’s unique goals. They charge a fee based on a percentage of assets and have discretion to make daily portfolio decisions. Money managers must have strong credentials and experience to be successful.

A money manager is responsible for managing the entire investment portfolio of an individual or business entity. He or she is paid in exchange for planning, monitoring, and implementing client investments. Client portfolios may include individual stocks and bonds, as well as real estate and other investments. Great emphasis is placed on customization and each portfolio is tailored to the client’s unique goals and objectives. Portfolio management is discretionary, which means that the money manager has the right to make daily portfolio decisions, without consulting the client.

Investing can be complex, stressful and time consuming. Investors often choose to take the pressure off by hiring money managers to assess the markets and make critical portfolio decisions. This can help investors have more time for other things, such as work, family, and hobbies. Also, a good money manager can help their clients avoid making costly investment mistakes.

A money manager generally manages larger portfolios, although each professional or company has different minimum investment requirements. In exchange for assuming responsibility for portfolio decision-making, a money manager charges a fee, based on a percentage of the assets in her care. Although these fees can be expensive, many investors consider the money well spent.

One professional money manager may choose to work as an independent contractor, starting their own business, while another may decide to take a job with a company. Every money manager has a unique investment style and philosophy. Many money management professionals use sophisticated techniques and technologies to make decisions and formulate investment strategies. Others rely more on simple intuition.

The fundamental objective of a money manager is to position the client’s portfolio to meet financial objectives, while managing appropriate risk levels. To be successful, a money manager must have excellent communication skills, a solid understanding of financial markets, discipline, and the ability to think through all aspects of investment problems. Since millions of dollars are often at stake, most potential clients expect money management professionals to possess strong credentials and experience as well.

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