Launching An Investment Fund In 2021: What Fund Managers Need To Consider

By Swindon Link - 23 September 2021

EducationExpert Voices

If you’re going to launch an investment fund, you need a sound strategy informing each of your decisions. If you prepare things correctly, you could stand to please many of your clients over a long-term period.

The UK is engulfed in a volatile economic period, making things more challenging for fund managers. Of course, they courted risk at the best of times, as was the nature of their role. They are even paid via a percentage of a fund’s assets, which directly ties their fate to their investment portfolios. Still, fulfilling client needs and monitoring market changes will be more difficult today and during the times ahead. 

If you’re considering launching your own investment fund in 2021, you need first to keep a few things in mind for the remainder of the year and as we go into 2022. We’ve outlined some guidance down below that should help you avoid mistakes and earn success.

Consider Your Background

As social politics comes to the fore of public awareness, people are becoming more conscious about other’s backgrounds. Is success for fund managers reserved for the elite, and are those without connections left out?

However, it may interest you to know that fund managers from poorer families often outshine their more affluent peers substantially. Of course, to most people, this would merely be an interesting piece of trivia, but if you’re a fund manager, it can either give you a spur of motivation or a swift reality check.

Your success isn’t dependent on your background, but confidence, self-motivation, and working under pressure are essential qualities in a fund manager. Your formative years may greatly influence who you are and your attitudes, so it may be worth reevaluating your journey so far. Are you a fund manager for 2021 and working hard? Or, are you more reliant on archaic practices, such as relying on connections and status to see you through?

It’s also worth considering the social climate of 2021. People are exposing injustices in every industry, and they’re also championing equal opportunities for all. Try not to let any personal factors hold you back, and remain hungry for success.

Provide Clarity

Investment funds can be bogged down in complicated terms. The jargon can also be tedious, especially to humble savers.

As a fund manager, you may feel tempted to showcase the full extent of your knowledge. Still, to your clients, you will likely be talking in terms that are mostly gibberish to them the entire time. Instead, focus on:

?      Speaking in terms that they understand – Plain language or even simple metaphors are better ways to communicate any information.

?      Having patience and being pleasant – If clients and savers struggle to understand what you’re saying, you need to find an alternative way of explaining things patiently. They will detect any aggravation in your voice and rightly interpret it for rudeness.

?      Offering detailed written explanations – Some savers may find your words little more than white noise, especially if they’re under stress or lack experience. Write down your guidance or updates on a computer (avoid handwriting as clients may be unable to read it), and print it off or send it via email.

?      Asking questions – Clients may be a little apprehensive about coming forward with their questions, fearing looking silly or being a bother. Invite questions and spend a reasonable amount of time answering them in detail. Only then can a more fruitful working relationship form.

Being a fund manager requires a great deal of expertise. However, this doesn’t mean you should forego the basics of interacting with customers. Appreciate that your clients may be inexperienced or even highly stressed after the last year’s events, and tailor your counsel accordingly.  

Nurture Your Aptitude for Change

The fund manager rulebook is under constant scrutiny, and clients needs are evolving with the times too. To survive, you need a complete understanding of what all of this progression entails.

The financial world used to be cold and calculating. However, the sector is now deeply embedded in the sense of ethics and values. For example, portfolios are now becoming more distinctly green, with almost £3bn reportedly poured into ethical funds. Investors are being touted as the unlikely eco-warriors of modern times, and aligning yourself with these principles could be highly beneficial. 

It may also be worth factoring in the younger generation and how their interests shape the future. As a fund manager, backing big innovative projects early is better than channelling resources into safer and smaller counterparts. Focus your efforts on where you feel a real sense of excitement rather than going through the motions. 

Develop Your Knowledge

If you’re a fund manager, then meeting change can be a logistical challenge. There may be new ways of doing things that you may not necessarily be privy to immediately.

In these incidents, it can be helpful to take proactive steps in developing your expertise. It would help if you linked your good attitude with high-quality and flexible learning opportunities. That way, all of your decisions as a fund manager can be supported by the latest offerings of learned knowledge. 

If you’re looking to build your knowledge on changes fund managers may need to accommodate, earning a sustainable investment certificate might work well. In doing this, you can ensure that your financial strategies will have value in society, not just to a strict client list. Embrace the future of investing. Impact investing, Environmental, Social, and Governance (ESG) investing, and positive screening – you can learn about it all online.

As a fund manager, you shouldn’t be waiting around for opportunities to present themselves to you. Instead, you should be pursuing them. Courses such as these can be organically integrated into your existing routine. For many, 2021 has meant fighting for survival on the professional landscape, so develop your time management skills and work relentlessly to grow your craft.

Refer to the FCA

Many professions refer to specific authority figures for consensus and direction. For fund managers, The Financial Conduct Authority (FCA) is that resource.

The FCA releases a great deal of compliance information, and the standards fund managers should be meeting. A report published in July found that many fund managers had not implemented satisfactory Assessments of Value (AoVs) arrangements, undermining the credibility with “poorly designed processes”. Some even failed to evaluate their fund’s performances accurately.

As a fund manager, you’re bestowed with a great deal of power and control. However, it’s also vital to ensure that you’re available for scrutiny. Set your ego aside and embrace all the potential of constructive criticism because it can give you a greater sense of direction in improving your techniques as a fund manager.

Review the FCA’s verdicts on the fund manager activities as soon as they’re available. Even if their insights don’t strictly apply to you, their knowledge can also serve as cautionary tales. Another fund manager’s mistake can also double as a lesson for you too, so keep referring to authoritative figures. 

Conclusion

Satisfying your clientele is now about so much more than numbers. Your investment decisions now carry far more weight to them. You must think about the well-being of your clients, and indeed, the world. Additionally, it’s vital that you’re flexible in your work processes and that you keep researching ways you can grow from authoritative sources.

In the end, stagnation could spell disaster for fund managers, so embrace an aptitude for accountability and meaningful change in the sector. 

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