Five tips to choose the right portfolio manager

What top five traits should your portfolio manager have?

Five tips to choose the right portfolio manager

Portfolio managers are the finance professionals who work with other analysts and researchers to research companies, monitor investment trends, and make predictions that guide your investment decisions so that you can reach your goals. You may already have access to one through your financial advisor, but you may also be looking for one to help you plot your best investment path.

Here’s a quick guide to the top five traits that you should look for in a portfolio manager to ensure you have the right person for your investment style and what you want your portfolio to accomplish.

  1. Choose someone with no personal interest in your investment plan:

First, and foremost, the portfolio manager should not have a personal interest in you investing in any particular plan or segment of the market. He or she should focus on you and how to help you reach your goals. You want someone neutral and open to all of the suitable possibilities rather than someone who has a vested interest in any particular product or path for you to follow until they’ve done their research to figure out what the best plan is for you.

  1. Choose someone knowledgeable, analytical, and decisive:

Portfolio managers sift through a lot of research, do scenario analysis, and plan for a range of outcomes in order to know what risks might be associated with your investments. So, you want to have someone who knows the market and is good at all of those components, but also aware of all the various risks involved, and can also see the trajectories and know how events could impact market activities, so that he or she knows that they are giving you the best recommendation for you, and why, amidst what’s happening in the world right now. 

  1. Choose someone with good performance:

Each firm and portfolio manager is different with different histories, investment philosophies, styles, profile, and fees, which can range according to your investment portfolio’s size. They can manage money in different ways and offer a wide array of products. Some also specialize in different types of clients. So, figure out what you want to accomplish with your goals and select the right portfolio manager, or firm, to ensure they are registered and align with your personal needs.

  1. Choose someone who communicates well and is transparent with you:

Portfolio managers spend a lot of time working with complicated data, but it you’re working directly with them, they need to be able to communicate their analysis and recommendations to you in a clear and transparent way that makes sense to you. They also need to be willing to communicate regularly with you – whether by phone, in person, or in writing so that you can stay abreast of what is happening and how it is impacting your investments.

They also need to be transparent with you, so they don’t confuse you by using complicated terms or professional jargon. You need to be able to understand what your portfolio manager is telling you, what the advantages and disadvantages are for each option, and what you will gain by following his or her recommendation. It’s up to you to ask if you have questions, but it’s also important that the portfolio manager can give you the answers you need to satisfy your concerns before, and during, your investing.

  1. Choose someone trustworthy:

Most portfolio managers are Chartered Financial Analysts, and many are members of the Portfolio Management Association of Canada. They should also be trustworthy – and leave you with a feeling that you can trust them with your money and financial goals. That’s a personal call, so only work with people you feel are honest and professional. It’s important to check out the portfolio manager’s background, business, and credentials to ensure that you’re giving your money to someone reputable who will help you understand what they’re doing with your portfolio and help you reach your financial goals.