Investment Management

Investment Management Definition

Investment management refers to the professional handling of a client’s investments; both buying and selling, as well as other services.

Investment management may be used for either a short-term or long-term portfolio.

Investment management can be done for an individual client or an entire institution.

Any investment manager handling over $25 million in assets must register with the SEC and provide fiduciary responsibility for their client.

What Is Investment Management?

Investment management helps clients meet their investment goals.

In the context of corporate finance, investment management means making sure the company’s tangible and intangible assets are maintained, accounted-for, and being utilized effectively.

Investment management may also be used when managing pension funds, retirement accounts, or other financial vehicles that rely on the accumulation of funds through investments.

Investment Management Industry

The investment management industry is the business of investing other people’s money.

The job requires qualifications and certificates that take time and extensive training to earn.

However, investment management provides healthy compensation and numerous opportunities for advancement.

Many investment managers start out in a different position.

Like a lot of financial careers, some people come from different industries and earn their certifications later in life.

Others might start from the bottom as a research analyst and work their way into investment management.

Many investment firms are affiliated with other types of businesses, such as insurance firms.

This makes investment management a good opportunity to get one’s foot in the door of a variety of related industries.

Investment Management Firms

Investment firms are institutions through which clients are put in contact with investment managers.

Depending on the firm, this may be a crew of individual professionals or the firm may manage clients as a whole entity.

The primary tasks of an investment management firm are:

  • Assess the client’s financial and investment needs and goals
  • Monitor both short and long term investment
  • Identify good potential investments from poor investments
  • Create investment strategies

Firms, as well as individual managers, often collect their compensation as a small percentage of the asset base they oversee for the client, usually in the range of 0.5% to 1%.

Therefore, the more prosperous your investments are, the more profit the firm earns.

Some of the largest investment firms, such as BlackRock, manage assets in the trillion of dollars.

Investment Management Services

Common investment management services include:

Some managers offer a variety of different services.

This is especially common in large firms that may have many employees working.

Investment management refers to the professional handling of a client’s investments - both buying and selling, as well as other services.
Wealth management incorporates elements of investment management, as well as other, broader financial areas like retirement planning.
Firms, as well as individual managers, often collect their compensation as a small percentage of the asset base they oversee for the client, usually in the range of 0.5% to 1%.
Investment firms are institutions through which clients are put in contact with investment managers.
Any investment manager handling over $25 million in assets must register with the SEC and provide fiduciary responsibility for their client.
True Tamplin, BSc, CEPF®

About the Author
True Tamplin, BSc, CEPF®

True Tamplin is a published author, public speaker, CEO of UpDigital, and founder of Finance Strategists.

True contributes to his own finance dictionary, Finance Strategists, and has spoken to various financial communities such as the CFA Institute, as well as university students like his Alma mater, Biola University, where he received a bachelor of science in business and data analytics.

To learn more about True, visit his personal website, view his author profile on Amazon, his interview on CBS, or check out his speaker profile on the CFA Institute website.