When you invest your money, you spend hours researching different investment options, markets, past growth trends and future potential. Firms do the same; except that their stakes are higher, they spend months in making their investment plans and require a team of experienced financial experts who know the financial markets inside out.
Not every firm wants to or can make an internal investment department so they outsource their investment management. Here are 3 things you need to know about outsourcing your investment management needs.
It’s a growing trend
The outsourcing investment trend gained its initial popularity among small firms who couldn’t afford to make an investment team but now even large corporations and institutional investors are opting for it to manage their multi-billion dollar investments as it provides better profit prospects, improved risk management, and greater compliance with the complex regulatory framework. According to a report, in 2017, the global value of outsourced investing assets reached $1.69 trillion with an annual percentage increase of 11.3%.
It reduces costs
Like any other outsourcing decisions, companies outsource their investment planning to reduce costs. Imagine the salaries of investment experts, material costs, utilities, and overhead expenses that’ll incur if you hire an in-house investment team. And if you choose not to have experts do the job for you, you’ll be risking all your investments. Outsourcing investment management is a cost-effective option and involves hiring an outsourced chief investment officer (OCIO) or a Strategic Investment Group and delegate all or part of your investment management to them.
It increases returns on your investment
The main business function of an OCIO or Strategic Investment Group is to invest in financial products so they operate in the financial market, have all the insights and can respond to dynamic market conditions to maximize your return on investments. They use their expertise, knowledge, and experience to manage your investment portfolio and help you achieve your investment objectives.
If you’d like to understand more about how outsourcing investment can help companies, visit moneycashandvalue.com. We have a host of resources that can help you take your business to the next level!