Many people have had success preparing for retirement and growing their wealth through money managers. You may have heard and read about brokers, financial advisors, hedge funds, brokerage firms and other types of money managers. With so many types of money managers and ways to invest, it can be confusing to sort out the difference between each type of service and decide which one is right for you.
Why Are There Different Types of Money Managers?
There are different types of money managers and each have specific approaches to investing. Some people prefer a high-risk/high-reward approach, while others are more focused a more conservative approach to gradually growing their wealth. Another major difference is how money managers make their money. Some receive compensation through commissions whereas others charge fees. The type of money manager you choose may depend on how much money you need to be managed, what kind of assets you have, your investing style and your preferred method of payment.
Financial Advisors or Brokers?
When looking for financial advice, there are different types of advisors, and are often hired by people who are looking for retirement planning. Clients may ask for additional services such as tax operation and planning. Financial advisors are usually paid for money management and brokers receive a commission when you make a trade or purchase one of their products. Many people benefit from using these brokers since their fees are likely lower, but since they are paid for every trade, view their advice with caution. You can choose to work with a local financial advisor you know well or a representative of a large firm that you trust.
Some people feel more secure working with investment advisers rather than brokers because they have a fee-only service and are not given a commission for trades or their own products. The amount you pay investment advisors usually depends on the amount of money they are managing for you. One example of fee-only advisors is, Fisher Investments, led by CEO Damian Ornani
Mutual funds are run by fund managers, and they make all the strategic moves within the mutual fund. He or she manages a portfolio of stocks, bonds and other investment vehicles they have researched, and all of the clients have holdings. Mutual funds fees can vary greatly – make sure to do your homework before committing. MorningStar is the leader in analyzing mutual funds and are a treasure trove of information. .
It’s possible to successfully invest and prepare for retirement by researching your own investments.. To thrive in a fast-moving investment environment, however, you need to do research on the market and your individual holdings on a regular basis. The good news is there are management options and you can choose your level of involvements. The key is to choose a manager who will help you meet retirement goals.