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Investment managers are individuals or organizations who handle activities related to financial planning, investing, and managing a portfolio for their clients.
From the day-to-day buying and selling of securities and assets to transaction settlement and performance measurement, investment managers oversee investments and act on behalf of their clients.
Investment managers can range in size from one-person offices to large multi-disciplinary firms with global offices. They follow market activity closely to help dictate investment decisions they will make for their clients, ensuring that portfolios are balanced and meet each client's needs.
Investment managers may meet with clients individually, or if managing the investments of a large business, the relevant financial team members at each company. Their fee is often based on a percentage of client assets under management (AUM). An individual with a $5 million portfolio handled by an investment manager who charges 1.5 percent annually would pay $75,000 in fees per year.
Client portfolios can include assets in market sectors such as technology, utilities, healthcare, or energy. Investment managers consistently strategize to expand product offerings for their clients.
In 2022, 72% of managers increased the number of investment products they offer to clients, and the 3 largest investment management companies globally based on AUM were BlackRock at $10 trillion, The Vanguard Group at $8.5 trillion, and Fidelity Investments at $4.2 trillion.
An investment manager is one type of investment adviser. An investment adviser is an individual or company who is paid for providing advice about securities to their clients.
"Investment adviser" is a legal term that refers to an individual or company that is registered with either the Securities and Exchange Commission (SEC) or a state securities regulator.
Asset managers, investment counselors, investment managers, portfolio managers, and wealth managers are all considered types of investment advisers.
While they all provide tailored investment advice, investment advisers can manage investment portfolios, offer financial planning services, provide licensed brokerage services to buy or sell stocks, or a combination of all these services.
Investment managers commonly hold undergraduate degrees in business, statistics, finance, mathematics, or accounting as well as an MBA or professional qualifications such as Certified Financial Planner (CFP). Graduates may enter the industry in an investment analyst role and move to a manager role with experience. Investment managers typically share the following skills:
The average annual salary of an Investment Manager as of June 2024.
Individuals interested in careers as investment managers should follow the same path as all regulated financial advisers:
The type of investment manager that investors choose depends on what stage they have reached in their financial planning process. A beginner investor may benefit by using a Certified Financial Planner (CFP) who can teach the basics of retirement planning. A seasoned investor interested in a wide range of securities may fare better with a portfolio manager.
Most investment managers outline their philosophy on their websites or in their disclosures. Data on investment returns and investment manager performance are often well-documented and ranked by media sites and financial watch groups.
Investors should consider fee structures when comparing investment managers. Fees and expenses typically include management fees, performance fees, custody fees, and commissions.
The term financial advisor (with the letter "o") is a generic term that refers to a broker or a registered representative. However, the term investment adviser (with the letter "e") is a legal term that refers to an individual or company that is registered with either the Securities and Exchange Commission or a state securities regulator. An investment manager is a type of legal financial adviser.
Certification as a Chartered Financial Analyst (CFA) is not a legal requirement for investment managers, but clients may likely prefer to work with an adviser that holds an industry-specific certification such as CFA, CFP, or Chartered Investment Counselor (CIC).
Investment managers focus primarily on individual securities and bond investments while fund managers work with mutual funds comprised of multiple securities and assets, often tailored to a particular market sector.
Investment managers are individuals or organizations who advise clients through financial planning, investing, and portfolio management. They commonly hold undergraduate degrees in finance, mathematics, or accounting and may have advanced degrees or professional certifications, and their fee is often calculated as a percentage of the portfolios they manage. An investment manager is a type of investment adviser, an individual or company who is paid for providing advice about securities to their clients and is regulated by the Securities and Exchange Commission.