Banking 101 -
The ultimate guide to discretionary investment management
If you are looking for a hassle-free approach to investing that can be tailored to your individual financial needs and goals, discretionary portfolio management may be the right choice for you.
When you engage with a discretionary investment manager, you agree to a mandate to which your portfolio will be managed. This discussion is often wide-ranging, including your broader financial circumstances and investment objectives. The mandate will set out your risk level, target asset allocation, and other factors like constraints to the portfolio that you wish to impose.
Once agreed, the discretionary investment manager has the freedom – or discretion - to actively manage your money and make changes to your investments while remaining within the pre-agreed boundaries. This approach saves you time by eliminating the need for approval on every change, trade, and transaction. Additionally, the investment manager's sole focus is to keep up with global events that impact financial markets, consider investment opportunities, and position their clients’ portfolios to react to the wider world, taking advantage of opportunities as they arise.
Read more about discretion, advisory and execution-only investing.
Benefits of discretionary investment management
- Tailored approach: A Discretionary Investment Manager will take the time to understand your individual goals, risk appetite, and financial circumstances to create a bespoke investment portfolio.
- Expertise: An experienced investment manager has the knowledge and expertise to navigate market fluctuations and make informed investment decisions.
- Time-saving: By outsourcing to a professional, you can free up your time.
- Diversification: This approach helps you diversify your portfolio, spreading your risk across various asset classes and investment opportunities.
How does discretionary investment management work?
- Initial consultation: Your investment manager will meet with you to discuss your goals and investment preferences, including your risk tolerance and any ethical or environmental considerations.
- Portfolio construction: You will receive a bespoke investment portfolio tailored to your needs and goals. This may include a range of asset classes, such as stocks, bonds, and alternative investments.
- Ongoing management:Your portfolio will be managed by your investment manager and their team. They will make ongoing adjustments to your portfolio to align with your goals and market fluctuations.
- Reporting: You will receive regular reports on the performance of your portfolio, including a thorough annual review of your portfolios with your investment manager.
Six tips for choosing a Discretionary Investment Manager:
1. Research and compare:
Before choosing a Discretionary Investment Manager, do your research and compare different providers. Look at their track record, investment philosophy, and how they approach risk management.
2. Client focus:
Choose a team that puts their clients' interests first. They should take the time to understand your goals, risk tolerance, and preferences, and create a customised portfolio that meets your needs.
3. Team expertise:
Look for a diverse range of expertise and experience. They should have a deep understanding of different asset classes and the ability to identify investment opportunities in changing market conditions.
4. Investment process:
Ask about the team's investment process, including how they conduct research and analysis, how they make investment decisions, and how they monitor and manage risk.
5. Transparency and communication:
Make sure the team is transparent about their investment decisions and strategy. They should also be proactive in communicating with you about your portfolio and any changes made.
6. Fees and charges:
Be clear on the fees and charges associated with using a Discretionary Investment Manager. Make sure you understand the costs involved and how they will impact your overall returns.
At Arbuthnot Latham, we provide a long-term investment management service that is tailored to meet your income and growth objectives while maintaining an agreed level of risk.
Becoming a client
Take control of your finances today by completing our enquiry form. Alternatively, you can call us on the number below and one of our team will be more than happy to talk about your future.
Further reading about Business Exit
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Where to invest your wealth: strategies for preserving your wealth and legacy
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DISCLAIMER
This communication should be considered a marketing communication. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research. It is for information purposes only and does not constitute advice, a solicitation, recommendation or an offer to buy or sell any security or other investment or banking product or service. You should seek professional advice before making any investment decision. The value of investments, and the income from them can fall as well as rise, and may be affected by exchange rate fluctuations. Investors could get back less than they invest. Past performance is not a reliable indicator of future results. The tax treatment of investments depends upon individual circumstances and may be subject to change.
The contents of this communication are based on opinions or conditions as at the date of writing and may change without notice. To the extent permitted by law or regulation, no warranty of accuracy or completeness of this information is given and no liability is accepted for its use or reliance on it.