We all know the truth here; and the truth is that no one has the superhuman power to plan, organize, and manage every aspect of his/her corporation. The business is just too expansive to watch over, no matter how sharp your eyes might be. Sure you can mitigate your obligations by passing them off to responsible staff, but that doesn’t solve the big issues looming in the distance. And if you chose to ignore the heavy build-up of thunderous clouds, soon the distant storm will float over and unleash a nightmare of such severity that can cripple your thriving business.
For example, say you hand over your investment office to an external manager; one that you continue to work side-by-side with, but for the most part let them run the show. As such, all the employees in said external committee remain under your care. They are your responsibility. Therefore, if you ignore petty problems among the outside organization, the brunt of the negativity lands square on your shoulders. And if your actions regarding investment problems are too slow, you put your hard earned money on the line, and that’s something no CEO should allow.
Besides, such external management is overly time-consuming and a hassle to boot. With such a setup, your investment committee is responsible for the tracking, hiring, training and firing of all money managers. And if you should decide to fire an employee, you then need your external manager to conduct research on plausible candidates, bring them in, and organize a hiring process with all hands involved, which in the end takes precious time away from important core issues. Why waste your resources on these extra steps and on an unneeded committee when there’s a better solution? Don’t tie your hands-up with such nonsense. Rather, turn over the full scope of investment managing to a third-party consultant capable of a beginning-to-end approach. Or in other words – outsource your investment program.
In all honesty, the combination of staffing issues, the desire to focus on core competencies, and the simple fact that you get frustrated with your investment performance over a period of time, makes you look for other options to manage your funds, making investment outsourcing an easy decision. By turning to a manager of manager, i.e. MOM, your assets will be handled by proficient managers who in turn pass your investments to specialized external managers. The end result is a comprehensive investment protocol that tracks all daily activities of money managers, ensuring the safety of your cash and the efficiency of your investment organization. Essentially, MOM is a class of financial intermediaries that hires professional investment supervisors to run facets of your investment fund. Specifically, MOM tracks the performance of each and every money manager, and thus has the authority to fire ineffective personnel and hire more competent replacements on your behalf. In other words, MOM is an alternative to working with a single investment portfolio manager, struggling to make all your asset decisions.
In the grand scheme of things, MOM is a great avenue for CEO’s looking to spend their money efficiently on investment. And recent indications show a heavier reliance on investment outsourcing. CEO’s like you are simply looking to shed internal costs and leverage external expertise for asset allocation and investment decisions, and investment outsourcing provides a number of options for distribution. In some cases, institutional investors allocate an entire asset pool to an outside management company, or other times investors choose to outsource a more specialized investment protocol. Either way, money is managed by experts, and managers are supervised by professionals, and in the end you save money.
And, saving money isn’t the only major benefit with outsourcing investment. When taking a close look at the model and comparing it to a traditional asset management model, outsourcing has the ability to effectively and quickly react to today’s rapidly fluctuating financial markets. By outsourcing your asset allocation decisions to specialized managers you can expect a more tactile investment approach that understands and takes advantage of fast-paced market shifts. A far cry from the slow moving and cumbersome traditional model that requires asset owners to seek investment board approval for any allocation alteration, no matter how strategic the changes may be.
Overall, investment outsourcing is a strategic relationship that relieves money management stress, and in the end saves corporate cash. Investing in MOM is a viable option that keeps you up-to-date on market changes and keeps you moving forward.
Daven Michaels is an award-winning outsourcer and author of the book, ‘Outsource This!’ Daven has been honored more than any other individual or outsourcing organization. You can get more information on outsourcing by visiting www.123Employee.com