Investment Management

2019/08/11

The management of assets such as securities, real estates, bonds and debt instruments by professionally trained personnel is known as investment management. Their services are sought by investors and companies to take charge of their investment vehicle and help them attain their perceived financial goals.

It becomes necessary to enlist the services of professionals who are experts in the financial markets, primarily because of the volatile nature of the markets and the complex investment instruments whose mechanisms are difficult to comprehend. The changes in financial regulatory requirements from time to time is another reason why we need financial experts to handle matters of investment management.

Investment managers or fund managers as they are lately known, are appointed with the objective to accomplish pre-determined financial goals. There are two types of financial management services. In advisory investment management, the fund managers advise their clients to park their funds in a variety of investment options. The final discretion is in the hands of the client and the manager is not responsible for the fate of the funds at the end of the term.

In discretionary investment management, the investment manager need to be given the power to handle the funds of the client without the approval of the client. In such investments it is the sole responsibility of the manager to achieve the stated objective of the investments at the end of the decided period.

Each individual or company has different financial goals depending on their needs. While an individual investor will seek maximum return on his investment,  banks and institutions may look to a minimal interest spread. The prime objective of investment management is to identify and set investment objectives of its clients and formulate a plan to achieve those objectives.

The investment plan depends to a large extent on the financial capacity and the risk taking ability of the investor. In case of larger investments, other factors like the state of the economy, government regulations and market conditions are also considered.

The role of an investment manager is crucial in today’s times for successful handling of investment funds because of  the uncertain economy. The experience and the expertise of the manager can help in applying the right investment parameters to extract maximum gains even in a failing market.

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