You Need A Private Portfolio Manager

Managing your own investment is complex, time consuming and too technical to leave to chance. When you invest over a period of time, you create so much wealth to yourself that you possibly cannot track it. If they are shares, you have to track to see if dividends are paid to you or whether there are capital gains or losses. Bonds may also mature and must be redeemed or the interest payments on the bond may be available. These are different classes of financial assets you can own that have different returns on investment patterns and there is a need to keep an up-to-date track of what is happening to your investment. Portfolio is a collection of investments held by an individual or organization. Your collection of investment could be bank accounts, shares, bonds, collective investment schemes; treasury bills, real estates, derivatives and so on. Private Portfolio manager or an investment advisor can be a professional of a Licensed Dealing Member of the Ghana Stock Exchange (GSE). It could be a particular staff in the Asset Management Department of a brokerage firm. This private portfolio manager will assume the responsibility of coordinating transactions involving all your investments.

Why you need a private portfolio manager

You may be too busy: in this time of increased unemployment, people have to keep more than one job to survive (those in the medical field call it locum), those in the business or finance professionals are also chasing after professional classes such as CIM, ICM, CIMA, ICA, CFA and ACCA. Workers become so exhausted after a tiring day and all they think of is to have supper, wash down and prepare for work the next day. Businessmen are often found chasing after contracts; family men and women also often get entangled with family and other social activities.

You may not understand the market: The capital market is a market where listed long term securities are traded. There are so many factors that affect the prices of stocks in the capital market. The value of your investment is the closing price of the stock multiplied by your shareholding. It is often easy to say the market is influenced by demand and supply forces but there are more to that. You need a seasoned investment advisor who understands the capital market and can analyze trends and both financial and non-financial information that can affect your investment.

Identify your investment objective: Most often, people invest without carefully analyzing why they are investing. Your investment objective is the reason for you investing. It can be for capital accumulation, unforeseen contingencies, to buy an asset or money to execute project. Your investment advisor through the asking of probing questions can help you know your investment objective.

Rebalancing of portfolio: Depending on your investment objective, some classes of assets must be taken out and new ones added to meet your new objective or needs. Your investment objective must change when you are nearing retirement or when you have a family or when one objective is achieved. For instance, if an investor is nearing retirement, there is the need to sell out risky stocks and stocks that do not bring the investor regular dividends or capital gains. The portfolio manager can add Treasury bills or cash and cash equivalent so that the investor does not lose a chunk of his/her investment to market fluctuations or risks. All these are aimed at the investor having a regular stream of income.

Help reduce portfolio risk: There are different classes of investments that also come with different risk profiles. Your investment advisor or portfolio manager would help you develop a portfolio that would be less risky based on your needs and investment time horizon. Certain classes of investment such as shares are risky. The portfolio manager understands the market and performs regular analysis that can help detect risk and prevent losses.

The portfolio managers have the systems in place: The portfolio manager works for a Licensed Dealing Member of the Ghana Stock Exchange. These LDM’s are required by SEC and GSE to have systems in place to monitor the investments of their clients.

What should you consider when choosing one?

Is the company licensed?

The company must be licensed by the Securities and Exchange Commission and it should also be a Licensed Dealing Member of the Ghana Stock Exchange.

Pay management fees: It costs the LDM some money to manage your investment to ensure you maximize returns. They use the internet at a cost, stationery etc. Besides, they have to make some profit in order to stay in business. For this reason, they must charge management fees. Adam Smith said “it is not for the benevolence of the brewer or the baker that we have dinner but for their own selfish interest.” You have to consider how much return they are likely to make and how much is reasonable to pay them. Most of the Asset management firms have fixed charges; say 10% of the value of your investment and this can be reviewed annually. Try to personally investigate first before choosing one. The caution here is, don’t go for a private portfolio manager because they may charge you less, consider how much returns they make and other factors listed below.

Seasoned analysts: Investigate to know how good their analysts are and their ability to make good returns for their clients. You can also find out how abreast they are with world news, local news and business related news by giving them a “morning call” anytime you hear price sensitive news that might affect your investment. If they are not aware of the obvious, then feel free to move your investment to another firm to manage for you. This is because price sensitive information is crucial to the return you make on your investment. You can further investigate to know how many of their staff are industry professional, how many of their analysts are licensed by SEC and go further to know if they are Authorised Dealing Officers of the GSE. Their team should be made up of lawyers, financial analysts, insurance experts, business experts and with the requisite certification. With that you can be assured that your investment is safe and it is in good hands.

Good customer service: Find out if they contact their clients through telephone calls, SMS, email on how their investment is doing. Are they responsive enough to client needs? Are their staffs dedicated to the satisfaction of their clients? How professional are they? It is always good to choose an asset management firm that has a good research department. Having a good research department is not enough; go further to find out how often they furnish their clients with information regarding the economy and their investment.

Asset Management Firms in Ghana

You can start today by contacting the under listed asset management firms. They are licensed by SEC and are regularly monitored to show compliance. The GSE on the other hand checks to see if they are complying with membership rules and regulations. Though they are all licensed by SEC, they all have a unique approach to asset management and they have different pool of talents in their teams. My job is brief you on what they do. Your responsibility as an investor is to investigate to know if you trust them to manage your investment.

HFC Investment Asset Management: They have been in this business for a long time now, they were the first to start unit trust in Ghana. Refer to my article on collective investment schemes on understand unit trust, www.skafuiteye.blogspot.com, http://www.modernghana.com/news/323648/1/collective-investment-schemes.html. Their team comprises of both international and local industry experts. They also have a strong research department. Contact them on 0302-683891 and visit their website http://hfcinvestments.com.

IC Securities Wealth Management Department: they have been able to act as lead managers for IPOS and major right issues in Ghana, like Cal Bank right issue and Tullow Ghana IPO. Their team comprises of both international and local industry experts. Contact them on 0302252621and visit their website, http://wealth.icsecurities.com/index1.php?linkid=247

Databank Asset Management: They also have seasoned analysts and they were the lead managers that brought The Trust Bank Ghana to the GSE. Their team comprises of both international and local industry experts .Visit their website http://www.databankgroup.com/assetmanagement and contact them on 0302-610610.

Goldcoast Asset Management: They are also licensed by SEC and they have about six branches nationwide. Email them via info@gscinvestments.com and call them on 0302-211411 or 028-9539373.

Sem Capital Ghana: They have a strong team of analysts and industry experts. Visit their website http://www.semfinancial.com and call them on 0302-240664.

You can visit http://www.secghana.org/investor/display_investmentadvisors.php for the detailed lists and contacts of some investment advisors.

You can direct all comments, suggestions and additions to skafuiteye@gmail.com, skteye@gmail.com. ©, Sophia Kafui Teye

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