2006-12-08 / Columnists

Focus On Financial Affairs

Professional Money Management: It's Not Just For Institutions
By Stephen J. Levine President, Harbor Financial, Inc.


When you hear the phrase "managed money", do you think of names like Rockefeller, Vanderbilt and the Harvard University Endowment Fund?

Many investors have this reaction, assuming that the services of institutional-level professional portfolio managers are only for the "big money" and are beyond their means.

Until recently, this was largely true. Often, when exploring the undeniable advantages of this type of investing, particularly for investors who must try to protect the gains they earn on taxable assets, potential clients found that two barriers stood in their way:

First of all, the professional money manager often required a minimum investment level far above what the individual investor could, or should , commit to one investment strategy, often several million dollars.

Secondly, the costs of investing through individually managed portfolios, when added to the erosive effects of taxes and inflation, reduced the potential rate of return to an unacceptably low level.

These two barriers, however, have nothing to do with the inherent benefits of this type of investing. They are external, manageable problems, and now there is a way to overcome them.

Cost-effective access to many of today's finest institutional-level professional money managers, who will manage your portfolio to your financial objectives, is now available to individual investors. These money managers will accept minimum investments as low as $100,000. They offer a broad array of investment styles, including tax-efficient and high alpha disciplines, sophisticated investment styles that are often good choices for substantial assets.

The access usually comes through programs, sponsored by financial services firms, which also offer you the services of a financial advisor. Your financial advisor can help you define your investment goals, select the appropriate money managers, and monitor the performance of your portfolio. As time and changing circumstances dictate, your advisor will help you modify your plan, recommending changes as appropriate, and working toward your specific financial objective.

The cost of this "basket" of financial services is lower in some sponsored programs than in others, and can be highly competitive with the cost of other investment alternatives. Investors who are interested in exploring individually managed accounts should contact a professional financial advisor for further information about the suitability of this type of investment for their situations, and about the broad range of investment styles available through these programs.

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