Should You Invest in Managed Investing?

Managed investing is a service offered by financial advisers and wealth managers that allows investors to outsource the management of their investments. Using this service can reduce the amount of time spent on administration and improve the likelihood of meeting your investment goals. It also provides the benefit of professional advice.

Whether you choose to invest in a managed account is a personal decision and will depend on your level of comfort with the risks associated with managing your own investments. While some investors may prefer to take on more risk to increase their potential returns, the increased risk comes with the potential for greater losses.

A managed account can provide the benefits of lower fees and increased diversification versus self-directed investing. Investors are provided with detailed portfolio performance reports which can help them track their progress towards their investment goals. However, the added costs of managing an account must be considered.

There are many different types of managed funds available in Australia and it is important to understand the risks and return profile of each fund before you invest. Generally managed funds invest in low to medium risk short-term assets such as government bonds, bank bills and mortgage-backed securities. They can also invest in property loans, corporate bonds and shares. The types of fees charged by a managed fund can vary and small differences in fees can have a big impact on your investment returns. Typically there is an establishment fee, which is the fee on each contribution made into your investment, a management fee and any other fees charged by the fund or your adviser.

The costs of managed accounts are based on a percentage of the assets under management (AUM). Generally, managers will charge between 1% and 2% of AUM. A fee structure that is transparent and easy to understand will be most beneficial to you in the long run.

If you are considering moving to a managed account it is important to find a trusted wealth manager who can deliver the results you are looking for. They should be a fiduciary, meaning they have a legal responsibility to act in your best interest.

Regardless of whether you decide to invest in a managed account or take on the challenges of DIY trading, it’s essential to start saving early and keep investing regularly. A well diversified portfolio can help you achieve your wealth-building goals and build a nest egg that can be passed on to future generations.

A self-directed approach makes sense for investors at the beginning of their wealth-building journey. It can be cheaper than using a managed account and will allow you to save more quickly, which can help you reach your wealth-building goals sooner. Having a self-directed strategy can also give you more control over your investments, allowing you to tailor your portfolio to meet your specific needs. This can be especially helpful in the event of a bear market. However, you should always speak to a qualified tax adviser before making any changes to your portfolio. Managed investing

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