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The Role of an Investment ManagerThe average investor knows about stockbrokers and those who handle alternative investments (i.e. mutual funds), but most people don’t understand the role of a private investment manager. To describe an investment manager in terms that the average person understands, it is a person who is responsible for managing the investment portfolio of clients.
In most cases, an investment manager also becomes the advisor, the person who will counsel the investor concerning his investments before he makes them. For his own good, it’s important that the investment manager be separate from the investment brokers with whom he may be directly dealing, or if he is buying property, separate from the real estate agent who is securing the properties.
Why should one use a private investment manager? It’s quite simple when you think about it. If you’re investing in real estate, for example, the real estate agent is not going to be concerned with you making a bad investment. All he wants to do is make as many sales as possible in order to earn his commission. Thus, he may know that an apartment building you are interested in buying is in an area that is becoming so crime-ridden that people are moving out quickly, but he will not tell you that. On the other hand, investment managers will advice you on both good and bad investments in spite of the consequences to him because his job is to help each client make wise choices in investments.
A private investment manager has more areas where he works than someone connected right to the broker or real estate agent, so he can become more detailed and resourceful in the way he secures the information you need. In this respect, he is writing his own paycheck because if he doesn’t do his job properly, it means you as the client will lose money, and thus, you will find someone else to oversee your investments. The private investment manager can’t afford to make a mistake because he has too much at stake. A broker, on the other hand, knows that if he fails you, there will be someone else there to take your place. Not only that, he will simply tell you that it’s the market trend, and that it changed in a direction he didn’t foresee. Whether that’s truly what happened is hard to prove, and as such, he covers any errors he might make in judgment.
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