As the rest of the year unfolds, investment management trends have been shaping the industry. Notable financial advisors and investment managers like Brian Gaister @gaister_brian have adapted to these trends and have since gained favorable results. Whether you’re a newbie private investor or investment manager, these trends in managing investment funds that will help you optimize your investing choices.
What are investment funds?
They are a supply of capital and services to investors from financial institutions. Investors then use these investing funds to buy securities but each them can retain ownership. Investment funds provide wider selections of opportunities and management services. The latter can be mutual funds, exchange-traded funds, or hedge funds.
In addition, private investors do not have a direct grasp on how a fund’s assets must be invested. To oversee this, a fund management firm or investment manager can be hired. They are the ones who decide which securities should the fund must hold and when they must be purchased or sold.
Meanwhile, consumer behavior, ethical choices, and technology advancement—they all bring change and opportunities in the investment management industry. To maximize cost-efficiency in services, firms and investment managers must follow these four investment management trends:
Trend 1: Being more ethical
The ethical part of investment management includes the fiduciary standards. These involve criteria that determine trust between the investor and the investment firm or manager. The issue in the recent years is whether a fund manager can prioritize the client’s interests or impose their own too aggressively. Consequently, clients demand a genuine customer experience. To stabilize this, firms have been adopting robotic financial advisors.
Robotic financial advisors are artificially intelligent systems that require lesser human intervention. Since 2008, they have been used by firms in the US to automate the allocation of customer properties based on individual investment. This leads to unbiased, non-traditional advice. Robo-advisors also direct funds to Exchange-Traded Funds (ETF) portfolios, only providing clients with two choices of services: active asset management styles or passive asset allocation techniques. Visit at Brian Gaister
Trend 2: Impact Investing
Global Impact Investing Network (GIIN) defines impact investing as “investment that is made into companies, organizations, and funds with the intention to generate social and environmental impact alongside a financial return.” It’s different from a grant because its purpose is to produce positive outcomes that can be seen on the society and environment. Impact investing also requires the investors to report the impact they made.
Before, impact investing was only frequent in few sectors such as health and educational institution. Now, it has become more accessible and applicable to asset classes, as opposed to before when it was only available to the extremely affluent. It was also limited to the latter because it only served growth for pension funds and wealth managers, and not private investors.
Nowadays, it broke out to be reachable for all types of investors because of the evident incredible financial returns. This is why advisors like Brian Gaister @gaister_brian might recommend impact investing in their client’s portfolio.
Brian Gaister @gaister_brian owns a family office that can help in developing portfolio strategies. Brian Gaister @gaister_brian Washington, DC penningtonpartners.co joined July 2014 and has since helped wealthy families manage their complex financial needs.
Trend 3: Spend lesser time on Passive Investment Management
A passive investment management strategy that can’t secure you in down years will impact you negatively in the long term. Fund managers can’t beat market indexes like S&P500. It’s better to minimize cost and invest in funds that are the same as the benchmark index returns.
You may get impatient with the highs and lows, but if you invest continuously, you will get as much as the average annual return for stocks of 11%. You must always aim for annual returns that are almost the same to average annual returns because it means you have a high total return.
Trend 4: Getting techy
Robo-advisors are only one of the helpful technology advancements in the investment management industry. Others are the software Blockchain, AI-assisted Big Data Analytics, and Robotic Process Automation (RPA).
What does the emergence of these tools mean to the industry? Technology advancements shape consumer behavior and ethical choices, just like the Robo-Advisor does with investment advising. Since automation is now mandatory in investment management firms, more clients are gaining confidence in their services. Nonetheless, the technology advancements would be of no use without committed and genuine governance on investment management firms.
If you’re a private investor who’s looking for an effective investment manager, you can get advice from financial advisors like Brian Gaister @gaister_brian. Mr. Gaister has experience in handling financial needs of private investors, institutions, and affluent families.
If you want his help on making investment decisions or finding an investment manager, you can contact him on Twitter, @gaister_brian Brian Gaister or keep in touch through his family office’s website. Just search for Brian Gaister @gaister_brian Washington, DC penningtonpartners.co.