Investment is an act related to finance and economy that is done to obtain an additional income or profit for the future. If you choose to invest in mutual funds, you must familiarize yourself with investment managers. They play an important role in your investment as they can help you in determine your profit. However, you will need to be careful when choosing an investment manager. There are several cases of investment scams that initially promised fantastic profit. If it sounds too good to be true, you should probably take a pass.
Here are some tips to choose an appropriate investment manager.
1. Check their Legality
You must always ensure that the company is officially registered with the Capital Market Supervisory Agency and Financial Institution, as well as the Financial Service Authority.
2. Experience
Ask and understand the experience of the investment manager. A good investment manager should have a successful reputation of guiding their clients in managing funds for a long period of time.
3. Track Record
Although many companies offer mutual fund investments, not all of them can grow your money. Do not hesitate to ask for the historical data of the performance of the funds they have managed. You must be cautious on their promises of high returns when their past performance does not seem promising. Although past performance is not a surefire indication of the future, the risk is considerably lower if you choose a reputable fund manager with a good track record.
4. Investment Style
Each investment manager has a different investment style. Some will lean towards having generated high returns by taking greater risks, where some would play it much safer. So, it's important to choose an investment style that matches your risk profile. If you aren’t big risk taker, you might be better off choosing a conservative manager. However, if you’re willing to take all of the risks, then choose a moderate fund.
5. Cost Transparency
Investment managers must always be transparent regarding their charging fees on clients. These may include purchasing, managing, and redeeming the mutual funds. Be aware that high fees are not a definitive indication of the fund manager’s expertise.
6. Select Quality Services
The last check list in choosing an investment manager is the company's services. You should experience yourself with their responses to your enquiries, including a request to provide you with past performance. Thus you will feel the quality of services. There is nothing better than to feel it yourself.
Investment managers must always be transparent regarding their charging fees on clients. These may include purchasing, managing, and redeeming the mutual funds. Be aware that high fees are not a definitive indication of the fund manager’s expertise.
