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For a newbie, the wealth management industry is a lot to take in; but that should not stop you from dabbling in investments and asset management. All you need is a wealth management firm that you can count on to put together a sound financial plan for you!

Take note of these important factors when looking for a wealth management firm:

Expertise and Experience

It’s no secret that the world of investment and financial management is a complicated one. That said, you’ll need a firm with the expertise to handle complexities and deliver the sophistication that unique situations require.

Don't fall too quickly for advisors who claim they've handled plenty of clients like yourself. Keep in mind that people's financial circumstances are rarely alike, and this is probably just a tactic to lure you in. Instead, why don’t you ask the financial advisors about specific clients with financial situations quite similar to yours? How were they able to help them grow and manage their money?

A good and reliable wealth management firm should have advisors who can make you understand their insights and ideas even if you're new to the whole thing.

Continuit

Here, consistency is key. In 10 or 20 years, you'll want to retire and enjoy the fruit of your hard work and investments. However, you definitely do not want your wealth management firm to do the same!

One important thing to consider when selecting asset and investment management firms is longevity. But the number of years in business alone won't suffice -- it is crucial to go for those with a dependable succession plan in place. Think of it as an assurance that they can continue taking care of your wealth management needs well into the foreseeable future.

Access to Resources

For your investment to grow, choose a firm that has access to a wide variety of products, services, and financial management options. While it’s true that most firms offer flexibility in terms of investment opportunities, some may have limited access to certain investment vehicles due to the size of the assets that they manage.

Thus, large scale investment firms may be more capable of leveraging their assets to address certain issues, negotiate fees, and formulate more sophisticated solutions to your investment needs.

Performance and Reputation

In the end, it all boils down to one thing – results. This is, perhaps, the most crucial box you'll have to tick. Before making your final decision, find out as much as you can and assess if the firm you’re about to choose has consistently delivered commendable results over time.

Spare some time and energy for research and get to know the firm a little beyond the surface level. You can ask your friends and colleagues for opinion or consult the internet for reviews and recommendations. Remember: your money and the future of your finances are at stake here.

Lastly, look for wealth managers you can work closely and comfortably with – someone you won’t hesitate to approach for inquiries or when you want things to be handled differently.

More often than not, people choose a wealth management firm on the basis of price. But you know what? Cheaper isn’t always better. What you need to look for is value.

Industry made overall gains of 7.40% through the year, the highest annual performance seen since 2013. The Preqin All-Strategies Hedge Fund benchmark posted returns of 7.40% in 2016, marking the best performance year for the industry since 2013 and more than tripling the gains made through 2015 (+2.03%). Despite a volatile start to the year which caused some performance difficulties, hedge funds rebounded to post positive returns in nine of the final 10 months of the year. This strong period of performance for the asset class sees three-year annualized returns stand at 4.83%, while five-year annualized gains have reached 7.47%.

Event driven strategies hedge funds saw double-digit gains in 2016, returning 12.47% for the year. This marks a sharp contrast from the previous year, when event driven funds were the only leading strategy to suffer losses (-0.78%). Overall, all leading hedge fund strategies posted positive returns across 2016, and only relative value funds saw their 2016 returns (+4.74%) fail to match 2015 performance (+5.65%).

Other Key Hedge Fund Performance Facts:

Smaller Funds Post Higher Gains: According to Preqin’s size classifications*, smaller hedge funds were able to generate the greatest returns in 2016. Emerging and small hedge funds saw gains of 8.18% and 6.40% respectively in 2016, while medium and large vehicles posted performance of 5.53% and 4.63%.

North American Funds Rebound: After making gains of 0.45% in 2015, North America-focused hedge funds returned 10.20% in 2016. Funds focused on Europe (+2.89%) and the Asia-Pacific region (+1.68%) struggled through the year, but strong gains in Latin America saw emerging markets funds return 9.96%.

Discretionary Funds Succeed: Hedge funds following a discretionary trading methodology returned 7.51% in 2016, improving on 2.51% gains made in 2015. By contrast, systematic funds saw their annual performance fall from 5.46% in 2015 to 4.44% the following year.

CTAs Struggle: Despite a strong start to the year, CTAs did not enjoy sustained gains through 2016, and returned 0.91% for the year. This an improvement on the 0.15% recorded in 2015, but remains a long way short of the double-digit returns CTAs posted in 2014.

Funds of Funds Lose Ground:

Funds of hedge funds recorded five months of losses in 2016, and only returned more than 1.00% in July. As such, annual returns for funds of hedge funds fell to -0.25% in 2016, their lowest performance year since 2011, when they saw losses of 3.98%.

Amy Bensted, Head of Hedge Fund Products at Preqin says: “2016 showed that hedge funds were able to cast off performance struggles that hampered them in 2015, and they posted the best performance year for the industry since 2013. Fear over China’s economy in Q1, the Brexit vote at the end of Q2 and the US presidential election in Q4 drove the narrative in 2016; and although there were some high- profile losses, the associated volatility created opportunities for hedge funds to produce significant returns for investors. Looking ahead to 2017, the continued consequences of these geo-political events are likely to remain key determinants of industry performance.

“Despite the marked improvement in performance, hedge fund managers will be aware that in recent years returns have still fallen short of other alternative asset classes and public market indices. This is especially pertinent in the wake of some high-profile investors announcing the reduction or elimination of hedge fund investments from their portfolio. As a result, firms will be eager to sustain the momentum built over the latter part of 2016 and to prove their worth as investments capable of generating non-correlated, downside-protected performance.”

*Preqin size classifications: Emerging (less than $100mn); Small ($100-499mn); Medium ($500-999mn); Large ($1bn plus)

(Source: Preqin)

Today saw the launch of ONS’s economic statistics theme days, with today’s releases focusing on productivity. Following the release of the latest figures, Phil Sheridan, senior managing director at specialised recruitment agency, Robert Half UK commented:

“One of the most common reasons productivity declines is due to a lack of employee morale and general unhappiness in the workplace.

“Business success hinges on a motivated and productive workforce. Yet new regulations, a growing talent shortage and the emergence of hot fintech start-ups means financial services is an industry ripe for disruption - our research shows that 86 per cent of financial services leaders have concerns about losing a top performer as the competition for talent intensifies.

“To help drive productivity upwards, financial services firms need to prioritise initiatives designed to boost job satisfaction and retain employees. For example, recognising employee success, giving clear direction and having open communication foster a culture where employees feel pride and appreciation in the workplace, helping create more fulfilled staff that consistently deliver the output the financial industry needs.

“Ultimately, a business is the sum of its parts. Without a focus on boosting staff productivity, organisations will quickly fall behind.”

 

A summary of today’s Productivity figures can be found here: https://www.ons.gov.uk/employmentandlabourmarket/peopleinwork/labourproductivity/articles/ukproductivityintroduction/julytosept2016

 

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