What is a Money Manager?
Have you acknowledged if you will have sufficient money for retirement? And do you know whether your current portfolio is performing up to expectation or not? If you cannot answer the question yet, it means that you may need to consider hiring a money manager at this moment. But what is a money manager itself?
Understanding What a Money Manager Is
If you are wondering what money managers are, they can be a financial firm or a person that manages an institutional or individual investor’s securities portfolio. Generally, a money manager will have expertise from various backgrounds to work with them. Their background ranges from research up to a variety of investment choices to monitor assets and also decide when the best time to sell them.
The duty of a money manager is to choose as well as manage investments carefully for her or his clients. In this case, it includes developing a proper strategy of investment, and purchasing and selling securities in order to meet the goals. On its term, money manager is also known as “investment manager” or “portfolio manager”.
Why You Need to Use a Money Manager
After learning about what is a money manager , it must be great for you to know the reason why you need to consider using his or her service for the sake of your investment. Well, there are actually some reasons for you to use it, some of the reasons explained as follow.
- Expertise – First, they are expert on their field. A money manager that is professionally trained has an ability to choose the most suitable investment for his/her clients’ portfolio. Typically, they hold Chartered Financial Analyst title that helps them to assess fundamentals of certain company. More importantly, they also usually have professional from specific sector. For instance, they may previously hold a big role in automotive industry so that they can provide an edge as the clients need them to select auto stocks.
- Resources – Second, a money manager has access to plenty of information and also tools like an interview with company executive, analytic data, research report, advanced financial software and so on. Having all of these resources make what is a money manager . Yes, he or she is the one that can make such best investment decision to get a higher chance of success.
What Makes Money Manager Different to Financial Advisor?
Now that you learn about a money manager, you may remember about the term of financial advisor as well. Even though financial advisor and money manager seems to have many similarities and work to complement each other, the fact is that these two jobs are different from one to another.
One of the things that make them different is actually the way they work. If money manager focuses more on successfully manage portfolio strategies, financial advisor focuses more generally to the client’s financial lives. Financial advisor also works to create their client’s comprehensive, detailed investment plan which is best to achieve a particular financial goal.
To make it easy for you to learn what is a money manager and what is financial advisor and why both of them are different, we have prepared for you the detail role of financial advisor and money manager to help you understand them better.
- The Role of Money Manager – Let’s begin from the role of money manager. A money manager is supposed to manage investment portfolio like the one we have mentioned for a few times before. Then, it also has a role to manage risk in a proper way. Moreover, they are also supposed to be able to avoid any unnecessary turnover in the management team. Next, they also need to operate all of their work transparently.
- The Role of Financial Advisors – How about financial advisor? A financial advisor is supposed to understand a specific financial live such as debt, cash flow needs, investments, and so on. They are supposed to learn about their client’s family as well as their goals. Moreover, they also may need to create a comprehensive and detailed plan of investment. After that, reviewing and adjusting the financial plan regularly is also needed.
So, what do you think about what is a money manager after understanding its role and why it is different from a financial advisor? If you are wondering which one is better for your choice right now, it is safe to say that there are actually some reasons to need both financial advisor and money manager. It is because combining the skill of professional money manager and a quality financial advisor will really help your financial planning strategy moving forward to your goal.
How Much You Need to Hire a Money Manager
Now that you are interested to hire a money manager to help you with your investment strategies, you may like to know how much you will need to use their services and get better investment strategies and portfolio later on. For your information, a money manager typically charges a management fee ranging from 0.5 percent to 2 percent for each annum. However, it is possible that the charge is dependent to the portfolio size.
So, if you ask what is a money manager fee? We can give you an example if the asset management firm charge a 1 percent management fee for a $1 million portfolio. It is equal to $10,000 management fee. Moreover, it is possible that there is a performance fee as well. And the range for this one is about 10 to 20 percent from the fund’s profit. Considering this one, you may need to ask for the detail fees for a money manager you find to make sure that you get the one that suits your need.
That’s all of the things you need to know about a money manager. If you think that it is the best time for you to use their service, you can start to find the best money manager out there and get help from them about your financial needs. Finally, you have known about what is a money manager and why you need their service.