Money Manager

Written By
Paul Tracy
Updated July 1, 2021

What is a Money Manager?

A money manager is an individual responsible for managing an investment portfolio, providing investment advice and planning portfolio strategies.

How Does a Money Manager Work?

A money manager buys and sells securities in a portfolio for clients and advises clients about what actions they should take in order to increase their returns. Money managers generally charge fees which reflect the performance of the portfolio rather than based on commissions from purchases and sales which ensure that the money manager has incentive for the value of the portfolio to grow.

Suppose Bob has $10,000 to invest and wants a professional to manage his new portfolio. Bob meets with a money manager who inquires about Bob's investment goals, his risk appetite, whether he is a long-term or short-term investor, etc. Based on Bob's feedback, the money manager chooses a set of securities that he feels will help Bob reach his financial goals. The money manager subsequently oversees Bob's portfolio for a monthly fee based on the value and performance of the portfolio.

Why Does a Money Manager Matter?

Securities investing can be a risky activity that requires time and information gathering, as well as money, in order to be effective. A money manager is a professional who constantly ensures that he is informed about the securities markets and who specializes in making portfolios grow through prudent investment strategies. 

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