LAMAC, Investment Consultants and Asset Managers – What is the Connection?
Investment Consultants are independent financial advisors who help individual clients manage funds for self-directed retirement or wealth management. Their role is to provide investment advice to their client, usually in the form of an amiable proposal. Most consultancies use investment advisers who have been accredited by the FHA or insured by PMI. Consulting firms hire investment bankers and registered investment representatives (RI’s) to manage the funds for their customers. These financial advisors work closely with the client to develop an investment plan that suits his or her needs and circumstances.
Investment Consultants advise their customers, who may include wealthy fund investors, fund managers, and state guardians, on what funds, asset classes, sectors, and countries to invest in as part of their investment strategy and overall portfolio building process. Many times, investment consultants are employed by pension and retirement funds, insurance companies, or by real estate management firms that also employ investment consultants. An experienced consultant can analyze a client’s financial statements, assets, liabilities, risks, objectives, and other relevant information and create a comprehensive plan for management.
Consultants perform an important function for both institutional and for-profit companies, but typically they are employed by banks and other financial institutions. Financial institutions often hire investment consultants in order to execute their asset management plans and strategies. In addition, there are private bank management companies that employ asset managers as well. As we have seen through recent economic developments, many businesses, especially small businesses, cannot afford to hire a full-time investment consultant. Therefore, many companies rely heavily on the expertise of outside resource firms such as investment consultants to meet their asset management objectives.
In some cases, an investment consultant serves as a lead manager for a company’s overall asset allocation plan or portfolio strategy. In this situation, the consultant is responsible for analyzing and evaluating several factors that impact the overall value of a portfolio, as well as deciding how to implement the recommended changes. Consultants also make recommendations about which investments are more appropriate for particular situations. As one might expect, these recommendations are often not made without due diligence by the investment consultants.
It is important that investment consultants be aware of their clients’ goals and objectives. As such, when developing a client relationship strategy, it is important for consultants to keep in mind what kind of advice their clients need and how they want to receive it. Investment consultants should be careful to avoid becoming too closely involved in the day-to-day operations of a client’s company, so it is important for consultants to keep their clients informed of their investment strategies and practices. This can be done through regular client correspondence or by providing more detailed information on a company’s website, newsletters, press releases, or annual reports.
Investment consultants must work in close collaboration with asset managers and investment bankers in order to provide the most reliable and relevant advice. The two sides must work together in developing a client referral program to ensure maximum client satisfaction. The creation of a strong client/company rapport is essential in order for asset managers to attract and retain high quality and dedicated consultants. Laminologists, though, say that asset managers should limit the number of referrals that an asset manager provides to LAMAC. Asset managers should “avoid giving too much information” to LAMAC, the investment consultants told The Street.