How to Manage Portfolios

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There are many ways to be your own portfolio manager for clients.

Here are just a few:

1. Subscribe to a model and follow it. Models
include Value Line Investment Survey, Standard
and Poors Model Portfolios, Dow Dividend
Strategy

2. Use asset allocation using low load funds from Dimensional Fund Advisors, Vanguard, Fidelity or ETFs

Of course, you have these other options for portfolio manager delegation:

3. Use a third party money manager. You simply gather the assets and they do the management.

4. Use a portfolio management platform where the management firm selects the individual managers

In all cases, the client’s fee will be 1% to 1.5% annually. In case #1, you keep the entire fee. In cases 2 and 3, something must be allocated to the fund or third party.

How to Choose a Portfolio Manager?

First, you select a custodian that will hold your client’s portfolios. These are broker-dealers such as Schwab, Ameritrade, Fidelity, etc. Note that they are not YOUR broker dealer, i.e. they don’t regulate you. They merely hold your client portfolios and execute the trades when you need to buy or sell.

Each of these custodians has a “portfolio management platform” of selected third party money managers. You can get tons of information on these managers and simply select those you want to use for your clients. Typically, the charge might be 1.5% with .5% going to the manager and the other 1% going to you.

Of course, these custodians don’t care how you manage the money. You can be the portfolio manager, use your own system or any system you find on the Internet. There are tons of options as you will find when you do searches on “portfolio management.”

There are also firms that manage managers like SEI and Assetmark. These are super simple ways of delegating the management of your client’s assets but there is no reason for you not to be the portfolio manager as indicated in item 1.

Tools for those who want to become
Registered Investment Advisors