Investment management services are professional services and procedures that help an investor generate profit and meet goals. The term can refer both to the actual firm or company providing investment help, or to the individual services themselves. Using investment management services may give an investor access to expert advice and investing options that he or she may not have as a private investor.
The different types of investment management services are often collectively referred to as “asset management.” Asset management is a broad term that includes all of the different behaviors and actions that go into making an initial investment profitable. Some basic types of investment management services include portfolio analysis, the actual buying, selling, and trading of stocks and other investments, and the generation of progress reports on a periodic and annual basis. While these services may be done by the investor, those with extensive portfolios may rely on an asset management firm to handle all investment management services.
Using an investment management services provider often comes at a high premium. Financial managers and advisers are experienced professionals with a wealth of knowledge and understanding about the ins and outs of investing that can help a client greatly increase his or her profit. In return, these professionals may charge fees for every step of the management process, such as providing a market analysis, making transactions, and making inquiries at the client's directive. Since investing is more accessible to the layperson nowadays, the use of investment management services is often restricted to those with high-value portfolios, since smaller investors will not want to cut into their returns to pay a manager.
One of the benefits of professional investment management services is access to a wider range of trading options than an individual investor can achieve. Since the company is technically investing the money on the behalf of the client, available trades are largely based on the reputation of the asset management company, not the individual client. A company with a respected reputation may be considered a lower credit risk, thus opening the door to more deals and better rates.
Partaking of investment management services is only useful as long as it generates profits, which is why one important service includes the creation of regular return reports. These reports let an investor know how well the company or manger is meeting investing goals, based on the performance of the portfolio and the stated goals of the investor. Most investment service providers will generate reports on a quarterly and annual basis to show clients how well their money is being invested; some even structure their salary system so that only managers that reach a certain level of profit for their clients receive bonuses.