Isn’t an Investment Advisor the same thing as a Portfolio Manager? Well, not necessarily. A Portfolio Manager is usually an Investment Advisor, but many Investment Advisors are not Portfolio Managers. The bar is higher for Portfolio Managers as we are required to achieve a higher level of education and experience in the investment industry. But perhaps more importantly, we are fiduciaries for our clients. This means that we are required (and held accountable) to act with care, honesty and good faith and always in the best interest of our clients. We are required to be completely unbiased in our advice, and to implement the highest standards of professionalism in the industry.
Other factors also set Portfolio Managers apart - one being fees. Portfolio Managers charge a percentage fee based on the portfolio they are managing, and they do not receive commissions based on the volume of transactions. This is an important distinction because it allows Portfolio Managers to achieve a better level of objectivity when recommending investment solutions to their clients. Another difference is that Portfolio Managers collaborate with their clients to create custom Investment Policy Statements (IPS) that function as a blueprint for how the investments within a portfolio will be managed. The IPS contains the client's goals, risk tolerance and the appropriate mix of investments, and regular communication is kept with the client to ensure that it is always current and reflects their needs.
A Portfolio Manager is an excellent option for people who have a larger net worth, who wish to achieve a customized approach to wealth management, and who are looking for a closer relationship with their advisor.
Maria Dawes, Portfolio Manager
Capstone Private Wealth