Increasingly, international business schools are incorporating the subject into their course outlines and some have formulated the title of 'Investment Management' or 'Asset Management' conferred as specialist bachelor's degrees (e.g. Cass Business School, London). For those with aspirations to become an investment manager, further education may be needed beyond a bachelors in business, finance, or economics. Designations, such as the Chartered Investment Manager (CIM) in Canada, are required for practitioners in the investment management industry. A graduate degree or an investment qualification such as the Chartered Financial Analyst designation (CFA) may help in having a career in investment management. There is evidence that any particular qualification enhances the most desirable characteristic of an investment manager, that is the ability to select investments that result in an above average (risk weighted) long-term performance.
There are a range of different styles of fund management that the institution can implement. For example, growth, value, growth at a reasonable price (GARP), market neutral, small capitalisation, indexed, etc. Each of these approaches has its distinctive features, adherents and, in any particular financial environment, distinctive risk characteristics. For example, there is evidence that growth styles (buying rapidly growing earnings) are especially effective when the companies able to generate such growth are scarce; conversely, when such growth is plentiful, then there is evidence that value styles tend to outperform the indices particularly successfully.
Portfolio alpha is obtained by measuring the difference between the return of the portfolio and that of a benchmark portfolio. This measure appears to be the only reliable performance measure to evaluate active management. In fact, we have to distinguish between normal returns, provided by the fair reward for portfolio exposure to different risks, and obtained through passive management, from abnormal performance (or outperformance) due to the manager's skill (or luck), whether through market timing, stock picking, or good fortune. The first component is related to allocation and style investment choices, which may not be under the sole control of the manager, and depends on the economic context, while the second component is an evaluation of the success of the manager's decisions. Only the latter, measured by alpha, allows the evaluation of the manager's true performance (but then, only if you assume that any outperformance is due to skill and not luck).
Another good bet could be a planner in the Garrett Planning Network, a group of certified financial planners who all pledge to make themselves available for smaller projects for an hourly fee. All of the members of this network are CFPs or they’re actively working towards this designation. It may be that you just have a handful of questions, and someone here could help you without charging too much.
Managing a client’s investments has its challenges: Investment management isn’t a precise science, and often even the pros fail to accurately predict the market. Despite this, a client’s anger may be directed at their advisor in times of financial turmoil, especially if their portfolio takes a dive. The investment management industry is also facing new challenges from the rise of robo-advisors, which offer a less expensive alternative to traditional investment management.
The pressure from this dual competition is why investment management firms must hire talented, intelligent professionals. Though some clients look at the performance of individual investment managers, others check out the overall performance of the firm. One key sign of an investment management company's ability is not just how much money their clients make in good times—but how little they lose in the bad.
If you’re just starting out, a robo-advisor may be enough to meet your needs. Automation has enabled traditional firms like Vanguard and Fidelity, as well as online-only companies like Betterment and Wealthfront, to substantially lower the price of portfolio management. These companies are ideal if you need investment management, but not holistic financial planning.
Before hiring a planner to help with your finances, make sure to understand what you are paying for. Question the planner about his or her specific training and qualifications, fee structure, and services the professional will provide. Consider developing a list of questions when vetting a financial planner. Finally, check the disciplinary record and references for the planner to make sure you’re receiving the best quality financial guidance.