Allowing someone to take responsibility for your finances is something that you must take seriously. Most entrepreneurs who are making their first investments must consider certain things about their investment manager. It’s important to ensure that your goals and investment managers are aligned to keep everything smooth throughout the contract period.
This relationship between the investor and manager totally relies on trust and requires clear communication. Both of you must collaborate to ensure that all your finances are invested in the right areas to get the maximum return. While deciding who you can trust with your finances, there are certain questions you can ask from your investment manager. Answers to these questions will provide you with a good idea of where your finances will be positioned.
All set to partner up with a potential investment manager? Don’t miss asking the important questions mentioned below in this article, keep reading to uncover them.
Top 6 Questions to Ask Hiring Investment Manager Before Hiring
The investment world is evolving, and you must ask the right questions to ensure you are signing for the best deal. Specifically, when you are thinking about investing a large sum of money, the decision should be considerate and informed. This article has compiled some top questions that you can ask your investment manager to forecast the outcome of your choice. Scroll down to find these questions and learn why they are important to ask.
Here are 6 questions you must ask your investment manager before proceeding.
1. What is Your Competitive Advantage
In the market, you will find a bunch of options trying different strategies to sell you their approach. Whether it’s the engaging presentations or colorful graphics, all these may look visually appealing. However, this shouldn’t be enough for you and your investment manager or must tell you how are they different from the rest.
Competitive advantage is not only limited to their fund’s performance but other elements matter as well. This means the fund manager is showing commitment by catching up over a coffee and keeping you always updated on your financial position. Considering these things, entrepreneurs refer to asset management companies to maximize their investment financial potential by leveraging field experts’ experience and knowledge.
2. What’s Your Investment Philosophy
This is another crucial question to ask your investment manager because you need to be on the same page with them. Before you sign a contract with them you should know what they do so you can stick with it. The reason why all this is important is that you need to ensure that your investment style and your investment management company style align perfectly.
To get to know about this you can ask the company a question like “Who are your typical clients?” An answer to this will allow you to find an investment management company that can easily align with your goals.
3. How Do You Deal with Risk
Considering today’s economic uncertainties, fund management companies utilize different strategies and mechanics to mitigate the risks. These risks come because of various reasons such as material risk, economic risk, inflation risk, etc. For inflation protection, most companies consider allocating assets towards real estate and commodities.
Asking all this is extremely important because this will allow you to get recommendations considering your risk profile. You will invest in the right areas where nothing goes beyond your risk tolerance.
4. What Did You Do Wrong in the Past?
The world of finances can be very complex and therefore it’s challenging to get everything right always. If there was no risk then there would be no role of hiring investment management companies. However, this is also what differentiates an investment manager from others in the market.
The right investment manager will own the risk and also the mistakes they made. This makes him more transparent, reflective, and personable. This is why you should consider asking what they got wrong in the past 12 months and what they learned from it.
5. How Am I Protected?
Knowing what protection you are receiving from your fund managers is important. Your investment managers have a responsibility to take care when it comes to dealing with your finances. Most of the reputed companies will communicate the right recommendations and provide advice considering your circumstances.
The right company will also have the rights and permissions from the government to give financial advice or manage investments. Knowing this, you can refer it asset management companies that provide you protection over your investments to ensure you have peace of mind.
Ready to Step into the World of Investment?
The right partner will maximize your investment potential by promising your funds return with a specified percentage. You can count on reputed asset management companies in the UAE to take care of your funds. Contact professionals now and invest your funds in the right areas.