The Importance of Investment Consultants
Investment Consultants help investors make the best investment decisions for their portfolios. Typically, individuals will hire brokers to help them select investments. Institutions, on the other hand, use investment consultants to oversee their pension plans and endowments. Most investment consultants offer a range of services, including analytical modeling, strategic asset allocation, and performance monitoring. Before entrusting your money to a new consultant, conduct a thorough background check of his or her credentials.
A chief executive of a small hedge fund recently expressed his frustration with the time and effort he had to spend evaluating investment consulting firms. Despite the numerous phone calls and meetings with investment consultants, he had only had minimal success. In his opinion, the entire process was ineffective and time-consuming. Further, he perceived a lack of transparency in the selection process, and felt that there was no better way to approach the firms.
An institutional investment consultant is the person in charge of managing the retirement assets of other people. The retirement assets are estimated to reach $30 trillion by 2020. These consultants help to place most of the money in the most beneficial places. While most people are unaware of these professionals, their actions are directly impacting everyone’s future. A recent survey by the National Association of Retirement Advisors shows that 80% of investors in the United States and Canada will have at least a small retirement fund.
While a wealth manager may have a good track record, an investment consultant’s track record is based on their reputation. A good investment consultant will always have the best interests of their clients at heart. He will never overlook their needs. And he or she will not charge high fees. As a result, investment consultants are not in your shoes. But the services they provide are invaluable to your future. If you’re serious about investing, an investment consultant can help you find the best investments to meet your financial goals.
A small hedge fund’s chief executive reportedly expressed frustration over the time and money he had spent on investment consultants. His time was not wasted, but the results were minimal. He would spend countless hours filling out requests for proposals, phone calls, and meetings. The chief executive felt that the investment consultants did not understand his needs, but simply acted in his or her best interests. A large hedge fund manager, however, was the only one he trusted.
The investment consultant’s recommendations are not based on their analysis of the client’s portfolio. Instead, they rely on subjective factors to determine the best investment managers for his or her clients. They will usually only recommend large investment managers with strong track records, which often underperform smaller managers by 1.14% annually. They also will only recommend big-name managers with high fees. While it is not always wise to hire investment consultants, a good consultant will help you select the best investments.