On your journey to financial success, who you choose to be your fund manager is one of the most important decisions you will make. This is because they can make decisions which can directly affect your financial stability. In today’s complex financial landscape, the role of a finance manager extends beyond mere number-crunching. They serve as strategic advisors, risk managers, and guardians of financial stability. Whether you’re an individual seeking to grow your wealth or a company aiming for sustainable financial success.
In this article, we look at some essential questions you should ask before selecting your finance manager. From assessing qualifications and experience to understanding investment philosophies and fee structures, we provide a comprehensive guide to help you make an informed decision.
First things first, what are your goals
As we have often reiterated. The first step in your financial journey (or in anything worth doing) is to articulate your desired goals and objectives. Before selecting a finance manager, it is essential to have a clear understanding of your financial goals. Your financial goals serve as the guiding principles for all financial decisions, including the selection of a finance manager. Whether your goals are related to wealth accumulation, retirement planning, or debt management, you can evaluate potential managers based on their ability to help you achieve them.
Defining your financial goals also allows you to identify any specific concerns or priorities that may influence your decision. As you embark on the process of selecting a finance manager, consider asking yourself the following questions to better understand your financial goals:
- What are my short-term and long-term financial goals?
- How do I prioritize these goals in terms of importance and urgency?
- What level of risk am I comfortable with regarding my investments?
- Do I have any specific financial concerns or priorities that I want my finance manager to address?
By clarifying your financial goals and priorities, you can make a more informed decision when choosing a finance manager.
After setting your financial goals, the next step is to investigate your prospective list of money managers. Among other things, you want to ascertain their credibility and qualifications. you also want to familiarise yourself with their fee structures and investment philosophy. To help answer these queries, here are four key questions to ask before deciding on a finance manager
1. Who are you?
The very first question you want to have an answer to is the Who are you question. It is a question that leads to an understanding of the capacity and character of the entity entrusted with your finances. This inquiry also unveils the values and principles that shape their approach to financial management. The question covers aspects like Expertise and Qualifications, Experience and Track Record, and even Licenses and certifications. Seeking clarity on your financial partners’ identity sets the foundation for a mutually beneficial and trust-based partnership as it helps clarify issues like a finance manager’s competence and commitment to delivering top-notch financial advice.
Below are some of the questions you want to answer when researching your potential finance manager:
- What professional certifications and licenses do you hold?
- How many years of experience do you or your staff members have in financial management?
- What sets you apart from other finance managers or advisory firms?
- How do you prioritise clients’ interests and needs in your financial recommendations?
2. How much do you charge
Hiring the right finance manager goes beyond just assessing qualifications and expertise. It also involves understanding the financial arrangements that underpin the client-advisor relationship. One of the pivotal questions to explore in this journey is “How much do you charge?” Or as the Yorubas will say “Elo ni owo mi”. This is because financial managers typically employ various blatant and hidden fee structures to compensate for their services. Some of these structures may include:
Flat Fee: A fixed amount is charged for a particular service or set of services, regardless of the time spent or assets managed. Flat fees offer clarity and predictability in cost.
Percentage of Assets Managed: The manager charges a percentage of the assets under their management as compensation.
As an investor, you want to find out which fee structure the company uses, how much they charge and if there are any other hidden fees or expenses that you should be aware of.
Asking these questions helps clarify the fee structure, potential additional costs, and the manager’s commitment to transparent communication. Understanding how the manager charges for their services is essential for assessing the overall cost-effectiveness and aligning with your budgetary considerations.
3. What is your investment philosophy?
Understanding the investment philosophy and core principles that guide a finance manager’s decision is important to building a solid foundation for financial success. Selecting a finance manager involves ensuring that their investment approach resonates with your unique financial objectives and risk tolerance.
The investment philosophy of a finance manager is the guiding framework for their decision-making process. It reflects their beliefs, values, and approach to managing money.
Some finance managers prefer a conservative investment philosophy, prioritizing capital preservation and steady, predictable returns. They may focus on low-risk investments such as bonds, dividend-paying stocks, and cash equivalents, aiming to minimize volatility and protect clients’ wealth over the long term.
In contrast, other finance managers embrace a more aggressive investment philosophy, seeking higher returns through active management and strategic allocation of assets. They may advocate for a diversified portfolio that includes a mix of equities, real estate, and alternative investments, leveraging market opportunities to maximize growth potential.
Regardless of the specific investment philosophy, the key is alignment with the client’s risk tolerance, financial goals, and time horizon. A finance manager’s investment philosophy should reflect a deep understanding of the client’s needs and preferences, ensuring that investment decisions are tailored to meet their objectives while mitigating potential risks.
Questions to Ask:
When evaluating a finance manager’s investment philosophy, individuals should ask probing questions to gain clarity on their approach and principles. Here are some questions to consider:
- What is your investment philosophy and approach?
- How do you customize investment strategies to fit clients’ individual needs?
- How do you assess and manage risk in your investment decisions?
4. How accessible are you?
Before you decide on who to give your money to, you need to ensure that you have a clear understanding of how to reach and communicate with your finance manager. Establishing effective communication channels is crucial for maintaining transparency, addressing concerns, and receiving timely support in managing your financial portfolio. Regular communication also ensures that you are kept abreast of any developments or changes that may impact your financial situation. It also means that you are able to make decisions that could potentially affect your wealth in a very prompt manner.
Questions to Ask:
- How often will we meet or communicate about my financial portfolio?
- How can I reach you in case of urgent financial matters or questions?
- Do you have a team or support staff available to assist with client inquiries?
The choice of a finance manager is a very important one that directly impacts your wealth and long-term goals. It goes beyond mere transactions; it’s about finding a trusted partner who aligns with your values and objectives. To aid your journey there are four critical questions to be answered: Who are you, How much do you charge, What is your investment philosophy, and How accessible are you?
Asking these questions provides clarity on the expertise, transparency, and alignment of potential finance managers with your needs. By arming yourself with this knowledge, you empower yourself to make an informed decision and improve your chances of success on your financial journey.
Why Cowrywise
At Cowrywise, we offer personalized financial planning services tailored to your unique needs, goals, and preferences to help build wealth that your future self would be proud of. We are reachable on social media platforms where we maintain communication with our clients. We also provide regular updates and insights into investment strategies and market trends. Click here to start your wealth journey.
