Good Investment Management Consultant
August 1st, 2009
A good investment management consultant will guide you and work with you in a logical, step-by-step process of developing and executing a sound investment plan. Specifically, an investment management consultant can help you:
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Analyze the past performance of your investment portfolio – not just how well individual managers and funds have done, but how well you have done overall.
Thoroughly assess your investment needs, including tax considerations, current income and future capital requirements.
Come to grips with your true tolerance for risk. Until they suffer big losses, people tend to believe they are more risk-tolerant than they really are.
Strike a realistic balance between risk and reward so that your expectations are within the realm of probability, based on historical investment returns.
Resolve family issues from spending habits to inheritance.
Address such issues as active vs. passive management (indexing), domestic vs. international stocks and bonds, number of managers, etc.
Test varying asset allocation mixes against your investment goals and arrive at a strategic level of diversification among asset classes and investment styles.
Simulate the likely best- and worst-case scenarios of any given asset and style allocation mix, so you are better prepared for the unexpected.
Explore the use of futures and options, short selling, commodities and hard assets.
Determine the quality and duration of fixed-income investments.
Gain control over scattered assets, consolidating investments and eliminating unsuitable vehicles.
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Interview and hire suitable managers based on a set of selection criteria tailored to your personal needs, temperament and biases.
Look critically at manager fees or trustee arrangements and, when appropriate, negotiate more reasonable terms.
Measure individual managers’ results as well as total portfolio returns against the right benchmarks.
Decide when to fire a manager who is not giving you the results or the service you want.
Monitor the entire investment process – including income flows, savings, cash needs and investment returns – and identify potential trouble spots.
Make tactical shifts in your investment plan when warranted by changing economic conditions.
Make major strategic revisions to your plan if your needs, goals or circumstances change.
Keep your emotions in check during turbulent times
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