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Nov 05

Lessons in Asset Management 4

3. Learn the business of asset management yourself

It is not enough to simply have a general knowledge of the goings on of asset management. You also need to understand it clearly.

Some people may not give full control to their managers, but will sign anything that these managers give them without really understanding what the papers are saying.

Remember that although you have worked with the same person for years, or a friend of yours knows him personally, he or she can still be tempted to rob you of your money.

A common occurrence all too often is that the manager needs money for some reason, such as an unexpected expense, a new house or car, and so on.

So they call clients and try to get them to move investments from one family of funds to another, getting commissions for each move.

Asset management is a risky and cruel business. Make sure that you are prepared to stand guard over your investments like a vigilant bulldog. After all, it is your money, and you need to protect it.

Watch for hidden fees and other ways that an asset manager can cash in even if they are not growing your portfolio as well as you had hoped.

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