Things to Expect from Your Investment Consultant

What do you expect from your investment consultant? Most of time, an investment consultant is hired because people think he does only three jobs: report on performance, conduct occasional search and review managers. Do you think the same? This is very short list. I must add few more things that a trustee should expect from an investment consultant. Have a look!

Monitoring the performance of managers- This goes beyond overseeing the performance of managers. It also involves monitoring their strategies, policies, and their implementations, organization changes. An investment manager should inform the clients about all these matters.

Help put decisions on rational basis- Investment decisions are complex and also involve many risks and uncertainties. Investment consultant should be able to define clear alternatives, key factors and potential consequences. No one can assure that all investment plans will work out but making them in framework of clear decision analysis will surely minimize the regrets if plans don’t work.

Accept changes- Change in policies, strategies and asset allocation is requirement of the financial investment management as the field is continuously evolving. Consultant should take the responsibility of keeping the policies current. For this, it is imperative for investment manager to stay up-to date with developments and variations in the markets. Furthermore, consultant must understand both asset allocation and liabilities. Investor must expect from his consultant to involve in research groups to bring in actual procedures and their implications.

Write account guidelines- Account guidelines become obsolete with the rapid changes in markets. It is preferable to have more and explicit guidelines. An investment management professional is responsible for bringing guideline issues in the notice of investor before any problem arises.

Monitoring the managers-An investment manager is not only concerned with managing financial assets. He must have broad vision. Many consultants report merely on bonds, shares and stocks while some focuses on real estate, advising and investment. An investment consultant must present full picture of opportunities for investors.

Conducting search-Whatever searches are required, consultant should be able to handle them all. Consultant must indulge in searches whenever required to ensure careful investment management process. You should expect your consultant to go into the depth of the issues and explore the new dimensions.

Team work- Investment management is not confined to only one department. It is imperative to expect your consultant to work in collaboration of other service providers as well. This is about relationship of both temperament and familiarity with other areas of professional competencies.     

If your investment consultant is not providing you with all these services then you need to reconsider your manager.