If you have decided that a portfolio manager is appropriate for you, consider the following 6 “Ps” to select one that best suits your needs. (We also outline portfolio managers in the context of the full array of investment options.)
- Portfolio Management Firm
Each firm’s profile is different, with its own history, ownership, size and profile. Firms manage money in different ways and offer an array of products. Some specialize in types of clients. The key to selecting the right firm is to ensure they are registered and they fit your personal circumstances.
Portfolio investment management performs two functions: client relations to ascertain needs and managing investments. In large firms, these roles are performed by different professionals. Most portfolio managers hold the coveted Chartered Financial Analyst designation (CFA charter), which is the most respected and recognized investment credential in the world. Portfolio managers provide active management to ensure your best interests are being met.
- Philosophy & Style
Portfolio managers use different investment management approaches and styles. Some managers are product specialists, some adopt a certain style such as value, growth or momentum, and some offer a combination of products and styles.
Performance is often the result of the disciplined application of a manager’s investment philosophy or style. Managers report and communicate performance in a variety of ways – through written, telephone and face-to face meetings. It is important to agree – at the outset – on how you will receive feedback on performance.
- Portfolio Management and Wealth Services
Depending on size and specialization, portfolio managers can offer investment products and services related to a range of assets, from fixed income to balanced to equities – from private and public markets. Firms may offer investments from Canada or from other geographic regions around the world.
- Payment for Services
Portfolio managers typically charge a management fee based upon the amount of assets managed. Fees vary and may depend on the size of the portfolio. All fees are disclosed fully on client statements. Portfolio manager fees are generally lower than mass-market or retail investments because they manage larger sums on behalf of fewer clients.