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How Corporate Actions Impact Portfolio Investment

Posted on January 10, 2025 by Imarticus Learning

Corporate actions are very important in determining the future of a firm in business and finance. The corporate action life cycle would be very helpful in informing one about the ethical nature and financial health of a company.

The blog discusses corporate action processing and its effects on stock prices. For example, what would happen if bonus shares are issued?

What Are Corporate Actions?

Corporate actions are decisions or initiatives that a company’s Board of Directors takes with the approval from its shareholders, considering the shareholder decisions. Most corporate actions signal an important landmark which would be able to affect the corporation’s structure, operation, and/or stock price. Changes include simple ones, like renaming, or major decisions, such as declaring dividends.

Corporate actions can be categorized into two classes: monetary and non-monetary.

Monetary actions affect the company and its shareholders in financial terms. For instance, a declaration of dividend directly affects stock prices and shareholder returns.

Non-monetary actions do not have direct financial implications. For instance, changing the company’s name or logo is a non-monetary corporate action.

Important Corporate Actions with Financial Implications

We will, in the following section, discuss five major corporate activities which have a direct impact on the corporation’s financial position as well as shareholders’ worth.

Key Corporate Moves and Their Impacts on Share Prices

The corporate moves of a company have a lot to do with the action of its stock performance in the market, as well as its shareholder value. Let’s analyze three key corporate moves and their impact on the market.

1. Profit Distribution (Dividends)

A dividend is a way whereby companies share profits with their shareholders. In the form of either per-share basis or percentage face of the share, it assures investors of current income.

Example:

In December 2020, Majesco announced an interim dividend of ₹974 per share. Then, the stock was trading above ₹980 per share. After a dividend declaration, the share price moves according to the same, falling from ₹985.65 on 21 December 2020 to ₹12.20 on 22 December 2020. This is natural since the payout decreases the retained earnings of the company and thereby its stock price.

2. Issue of Extra Shares (Bonus Shares)

A bonus issue of shares is a term where additional shares are distributed among existing shareholders at no extra cost. For instance, the phrase 1:1 bonus is an example where one share for each shareholder shall be issued.

Effect on Value:

With an increase in the number of shares owned, there is a corresponding reduction in value per share without the change in total investment value. In essence, the stock becomes less expensive and more appealing to small investors.

Illustration:

Astral Poly Technik, a leading plastic pipes company, had a record date set as March 19, 2021, through a 1:3 bonus share issue. The shareholder gets one additional share for each three shares held. While the numbers rose, the price per share diminished to keep the value of investment essentially the same.

3. Split of Shares (Stock Split)

This divides existing shares into smaller units so that the total number of shares available increases, without affecting the investment value. The practice is commonly used to make stocks at a higher price level more accessible to more investors.

Impact on Market:

For the illustration, suppose the stock has undergone a 1:2 split, then the shareholder holding shares worth ₹10 each is given 25 shares having face value of ₹10. After the split, he holds 50 shares whose face value is ₹5 per share. The value of the investment remains the same, while the decreased price level makes for more trade and enhances market liquidity.

Example:

The company with pricey shares, Eicher Motors, declared a 1:10 stock split effective from August 24, 2020. The pre-split share price was ₹21,700. It has dipped to ₹2,300 a share, hence easy to trade for investors, increasing participation in the market.

4. Issues of shares to existing shareholders- Rights Issue

Rights issue permits a company to raise new share issues solely to the existing shareholders instead of the general public. These are unlike bonus shares since their purchase is chargeable; the price often is relatively low. An example of rights issue is the 1:5 rights issue where an investor can purchase one additional share for every five held.

Why It Is Done

Companies typically opt for rights issues to finance expansion schemes or pay off debts. Nonetheless, one must study the company’s future before investing.

Illustration:

Reliance Industries had a rights issue in April 2020 at a 1:15 ratio. The shareholders were allowed to purchase one share for every 15 held at ₹1,257 per share, which is 14% below the closing price on April 30, 2020.

5. Share Repurchase (Buying Back Shares)

Share buyback happens when a company purchases some or all its shares issued to investors at a premium. This helps to reduce the common stock, increase earnings per share, and convey a good signal about the company’s future.

Why It’s Useful:

Buybacks can be used for various purposes:

Strengthen the control by consolidating ownership.
Prevent hostile takeovers.
Supporting share prices during a sharp market decline.
Building investor confidence in the management team.

Example:

GAIL launched a buyback of around 6.97 crore shares on February 25, 2021, at ₹150 per share. The date for eligibility for the purpose was January 28, 2021. The company funded the buyback from internal cash reserves.

FAQs:

1. What are corporate actions and why are they important?

Corporate actions are any plans initiated by the Board of Directors that the management may implement in their operations, structure, or stock price. They give deeper insight into the financial condition and strategic direction of the company.

2. How does a declaration of dividend affect the price of a stock?

Generally, declaration of dividend declines the prevailing current stock price through the declared dividend amount as the retained earnings are stripped off the business.

3. How does bonus shares differ from rights issues?

Bonus shares are distributed without any payment, whereas a rights issue permits shareholders to purchase further shares at reduced prices.

4. In what ways does stock split advantage the investor?

The stock split brings down high-valued shares into affordable and therefore increases the participation in the market as well as liquidity without increasing the overall value of investment.

5. How does a declaration of a dividend affect the price of a stock?

In general, when a dividend is declared, it reduces the present stock price by the amount declared as the declared dividend reduces the retained earnings of the business.

Conclusion

Understanding the impact of corporate moves is important to value a company, make an informed investment decision and effective portfolio management.

For example:

A rights offering would reduce the prices of shares in the short run because of increased share supply.

A buyback would increase share prices in the short run as a result of share scarcity.

By analyzing these moves, investors can effectively hold, buy or sell their shares.

Corporate actions can be included in investment strategies to allow an investor to make the best decision. For further knowledge of corporate actions and what they bring about, take an investment banking course to help sharpen your skills and strategies.

Understanding Trade Operations in Investment Banking: A Beginner’s Guide

Posted on January 8, 2025 by Imarticus Learning

Investment banking is an industry that moves with a high speed, high-stakes game where billions of dollars are traded daily. Yet, a vital part that often eludes newbies is the trade operations carried out in investment banking. With a crippled trade operation process, an entire investment banking ecosystem would stall and begin to break down on aspects as minute as compliance and profitability. The guide discusses what trade operations are, the process undertaken, and their critical involvement in investment banks.

What Are Trade Operations?

These terms refer to the management of verification and settlement of trade that occurs in the markets. Trade operations are important components of the trading mechanism of an investment bank for recording, verification, and completion of each trade transaction in practice.

The Trade Operations Process

There are a few important steps that comprise the process of trading operations. Let’s consider each of them step by step:

Trade Execution:

The trade execution is the first process stage. If both the buyer and seller of a financial instrument such as stocks, bonds, and derivatives have agreed on some form of terms, then a trade is said to exist. Generally, it is through the traders that the orders will be put in the system as part of trade execution.

Trade Confirmation:

After a trade is executed, confirmation is required. Trade operations professionals check that the details of the trade are consistent across both sides of the transaction. This includes checking for consistency in price, quantity, and other terms. If any discrepancies are noted, they are flagged for resolution.

Settlement:

After trading is confirmed, settlement sets in. It is simply transferring securities or funds to each other from the buy-side and sell-side. Proper settlement keeps a business from incurring losses arising from a counterparty who fails to fulfill the other end of the exchange.

Reconciliation:

To ensure everything is accurate, the operations teams of trade operations reconcile the transactions with the bank’s internal records and with external market data sources. This is for the identification of discrepancies that could require correction.

Reporting and Compliance:

Last but not least, the process of trade operations requires reporting of all trades in a timely and accurate manner to the appropriate regulatory bodies. It is ensuring that it is compliant with the regulation of trading practice such as Dodd-Frank Act or MiFID II.

The Role of Trade Operations in Investment Banking

There are various reasons why trade operations are essential, for example:

To Minimize the Risk:

Minimizing Risks The primary roles that trade operations play in risk minimization are issues, such as trade discrepancies. They should ensure regulatory compliance and avoid fraud.

Increase Efficiency:

One of the aspects of having a proper, well-working trade operations group is settling trades promptly and with all accuracy for maintaining liquidity and operational efficiency.

Regulatory Compliance:

Investment banks are operated in a highly regulated environment. Trade operations thus become a very important business that ensures all transactions pass the test of global regulatory compliance, thereby avoiding the associated penalties and maintaining reputation of a bank.

The front office (traders and salespeople) depend on trade operations to see that their trades are taken through with minimum friction, and even the best trade can go sour because of operational inefficiencies if this process is not effective.

Importance of Trade Operations in Investment Banking

Global financial transactions are becoming ever more complex and voluminous. According to a Bank of New York Mellon 2023 report, for example, the trading volume in equities markets exceeded $100 trillion in 2022. The higher the volume of transactions involved, the more crucial becomes the process of trade operations. In case there is some error in the processing step, for example, any settlement error or trade mismatch, losses are extremely high, penalties cause severe legal consequences, and relationships with clients may severely be harmed.

Algorithmic trading, in which algorithms are used to execute trades instead of human traders, has complicated the operations of trade lately. Such high-frequency trades require much more complex systems of verification, confirmation, and settlement, thus demanding very skilled professionals in trade operations.

Training for Trade Operations: Investment Banking Courses

An investment banking course, therefore, is the gateway for entry into the trade operations world, providing one with the foundational knowledge necessary to understand the intricacies of the industry. Comprehensive coverage of financial instruments, regulatory environment, risk management, and operational strategies are offered in such courses, all very important to anyone working in trade operations.

For those who are just breaking into the trade operations world, an investment banking course can provide a base of knowledge to help one understand the intricacies of the industry. The courses provide a broad overview of all financial instruments, the regulatory environment, risk management, and operational strategies that will be essential for any employee working in trade operations.

Explore More:

The Top 5 Skills an Investment Banker Needs

A detailed curriculum typically includes:

Understanding Financial Instruments: You will be familiar with the different financial instruments that are traded in investment banks. These include derivatives, equities, and fixed income.
Trade operations risk management: You will understand how to identify, mitigate, and manage risks through the entire lifecycle of the trade.
Regulatory Framework: You will learn about the global regulatory standards and how they affect the process of trade operations.

Key Statistics

Trade Volume: The World Federation of Exchanges stated that the global securities market traded $100 trillion in 2024, showing that the trade operations are on a huge scale.
Settlements and Errors: According to the ESMA, operational errors led to 61% settlement failures in Europe, indicating the importance of efficient trade operations in avoiding financial losses.
Algorithmic Trading: Algorithmic trading represents about 60-70% of global equities, and therefore, seamless handling of such trades becomes a necessity for trade operations.

Chart: Global Trade Volume Growth (2010-2022)

Year\tGlobal Trade Volume (Trillions of USD)

2010\t52.3

2015\t76.1

2020\t91.4

2022\t120.3

Source: World Federation of Exchanges

FAQs:

1. What is trade operations in investment banking?

Trade operations in investment banking relate to the administration, validation, and settlement of trades, maintaining accuracy and efficiency in all the transactions. It is a necessary process for keeping compliance and risks at bay.

2. What are the key steps in the trade operations process?

The process involved in the execution of trade operations is trade execution, confirmation, settlement, reconciliation, and reporting/compliance. This whole process makes investment banking practice reliable, risk-free, and complaint.

3. What are the roles of trade operations in investment banking?

It helps reduce risk and improves operational efficiency with added compliance for a bank. Its front office also supports trade operations in settlement in an operationally fit state.

4. Why is an investment banking course useful for a professional working in the operations of trade?

An investment banking course instills knowledge in financial instruments, regulatory frameworks, and techniques of risk management. It equips practitioners for outstanding performance in the operations of trade in investment banking.

5. How do operational mistakes affect the process of trade operations?

Operational errors in the trade operations process, such as mismatches or settlement failures, can result in financial losses, legal penalties, and strained client relationships. So, efficient trade operations are required to avoid all these pitfalls.

Conclusion

Understanding trade operations is critical in entering investment banking. Indeed, it is through a process of executing trades as settled and reported with lesser risks that the process is ensured. Investment bankers aspiring to join this stream or experienced professionals wanting specialization in the trade operation are encouraged to enroll for any investment banking course to acquire the needed expert knowledge for success in these dynamic processes.

What Makes a Strong Financial System? Key Components and Design Principles

Posted on January 8, 2025 by Imarticus Learning

Imagine a world where money doesn’t move smoothly. Businesses would struggle, investments would dry up, and economies would fail to grow. What keeps everything in balance is the financial system. It’s the foundation that supports trade, investment, and economic stability. But what makes this system strong? Let’s break it down and explore why understanding this is vital for aspiring investment bankers in India.

What is a Financial System?

A financial system is a network of institutions, markets, and tools that help money flow through an economy. It connects savers, borrowers, investors, and organisations, ensuring funds are used efficiently. In fact, this system is growing fast in India. For example, according to RBI, banks held 64% of financial assets in the nation in 2023. The extent to which an economy’s financial architecture is designed contributes significantly to shaping it.

Key Components of a Financial System

Here’s a closer look at what makes up a financial system:

✅ Financial Institutions: These include banks, NBFCs, and mutual funds. They act as middlemen, connecting savers with borrowers and ensuring everyone has access to financial services.

✅ Financial Markets: Capital markets (stocks and bonds) and money markets (short-term loans). These enable businesses to gain funding and investors to build wealth. Clearer rules and transparency are thus key to making the markets effective.

✅ Financial Instruments: Because they are fuel for effective investments and minimize risk, financial instruments include stocks, bonds, and derivatives. They also optimize the use of savings available in the economy.

✅ Financial Infrastructure: Clearinghouses, payment systems, and credit agencies allow smooth and secure transaction executions. They reduce risk factors and make the system sound.

✅ Regulatory Framework: Organizations, such as RBI and SEBI, enforce rules which protect investors, maintain impartiality, and instill financial discipline.

Characteristics of Financial System

A robust financial system does more than just keep money moving. It ensures trust, stability, and growth. Here’s what makes it strong:

✅ Efficiency: Funds should flow quickly and at low costs.India’s adoption of digital banking services, in particular UPI, stands as an excellent example. In 2023, transaction costs for digital payments reduced by 20%, where UPI processed over 10 billion transactions each month, raising overall efficacy.

✅ Transparency: Open and honest practices build trust. For example, SEBI requires listed companies to disclose financial data, helping investors make better decisions.

✅ Resilience: The system must recover from crises like we saw in the COVID-19 pandemic. During this period, Indian banks implemented measures like loan moratoriums to stabilize the economy.

✅ Inclusivity: Every person should ideally have the access to financial services. Schemes like Jan Dhan Yojana have brought millions into the financial fold by opening over 50 crore bank accounts by 2023.

✅ Innovation: The system stays relevant with new technologies. India’s fintech industry is one of the leaders, where platforms like Paytm and Zerodha make payments and investments easier.

✅ Stability: A strong system avoids extreme fluctuations that harm economies. The RBI, for instance, monitors risks and manages inflation to maintain stability.

Resilient Financial System Infrastructure

A resilient infrastructure is built on certain financial system design principles. These ensure it can adapt and thrive in a changing world:

✅ Stability: Mechanisms like stress testing and liquidity buffers help manage risks and protect the system during tough times.

✅ Adaptability: The financial system must evolve with market trends. India’s embrace of digital platforms like UPI showcases adaptability in action.

✅ Accountability: Clear rules and responsibilities prevent unethical practices. SEBI’s focus on corporate governance ensures fairness and builds trust.

✅ Sustainability: Green finance and investment that is ethical are becoming increasingly important. India’s authorization of INR 80 billion in green bonds in 2023 expresses this shift in the direction of long-term, environmentally friendly growth.

Why This Matters for Investment Banking

For investment bankers, a strong financial system is essential. Here’s why:

✅ It provides stable markets for deals like IPOs and mergers.
✅ It opens up opportunities for new financial tools and innovations.
✅ It creates career growth by building a deeper understanding of how the system works.

In 2024, India’s financial system demonstrated its strength. The country’s stock market saw a ₹1.19 lakh crore IPO boom, and the financial inclusion index rose to 64.2, reflecting increased accessibility and trust.

FAQs

What are the main parts of a financial system?
Financial institutions, markets, tools, infrastructure, and regulations.
What makes a financial system strong?

Traits that make a financial system strong are – efficiency, transparency, resilience, inclusivity, innovation, and stability.

How does it affect investment banking?

It affects investment banking by ensuring opportunities for growth, stable markets, and room for innovation.

What principles make the system work?

The key principles that make the financial system work are – stability, adaptability, accountability, and sustainability.

Why learn about financial systems?
Learning about the financial systems is essential for anyone aspiring to pursue a career in finance or investment banking.

Final Thoughts

A strong financial system is the lifeblood of any economy, facilitating growth, innovation, and stability. For students and professionals in India eyeing a career in investment banking, mastering the financial system—its key components, infrastructure, and design principles—is non-negotiable. To get a head start, consider attending an investment banking course that is well-tailored to the unique financial landscape of India.

As the financial world evolves with trends like green finance and digital transformation, staying informed and skilled is your pathway to success. Let the principles of a robust financial system guide you as you chart your career in this exciting field.

Equity vs. Debt Financing: Pros, Cons, and Strategic Applications

Posted on January 6, 2025 by Imarticus Learning

Business owners and companies need financial resources to expand their businesses or organisations. This extra money is used to add products, open more stores, or hire more human resources. When a business has sufficient capital or money, it can grow its team, buy new machinery or equipment, or rent office space. The two major capital options for businesses or companies include equity financing and debt financing.

Keep reading to understand equity financing and debt financing and the pros and cons of equity vs. debt financing.

Debt Financing vs. Equity Financing

In finance, a business or organisation’s capital structure consists of debt and equity. Both equity and debt financing have advantages and disadvantages. A company or business owner needs to decide between equity and debt capital depending on the financial situation and the company’s goals.

What is Equity Financing?

Equity financing involves selling a portion of a company’s equity in return for capital. For example, a business that creates and distributes toys needs money to buy a warehouse to store inventory and use it for packaging. To get the money for the warehouse, the business sells 5% interest in the company to an investor who is willing to provide the money needed to expand the operations. The investor now owns 5% of the toy business and can weigh in on important business decisions. The different types of equity financing include:

Angel Investors: An investor who wants to help startups get the money they need to create and build their businesses. Angel investors receive equity in the company for their capital investment.
Initial Public Offering (IPO): IPO is when a company goes public and investors can purchase shares in your company.
Equity Crowdfunding: This involves soliciting money from the target audience in exchange for equity or a promise of goods or services, once the business realises its financing goals.
Venture Capital: This involves securing venture capital from a firm made up of investors willing to combine their money to invest in either startups or small businesses.

What is Debt Financing?

Debt financing refers to a company borrowing money that they will pay back with interest. A business can obtain debt financing through a bank, financial institute, or even an investor. There are various types of debt financing options available. Some of the major ones include:

Line of Credit: When a business has direct access to certain funds that it can use when needed. The lender sets a cap on the available capital and the business only pays interest on the money used.
Personal Loans: These are perfect when a company is brand new and must use their assets. Securing a personal loan can help new business owners get started.
Credit Cards: Business credit cards are also subject to some of the same terms as personal credit cards. This includes repayment schedule and interest rate.
Conventional Loans: With these loans, a business receives the lump sump of money required. They pay back the money with interest in a predestined amount of time.

Equity Vs Debt Financing– Pros

Below is a list of equity and debt financing advantages.

Equity Finance	Debt Finance
No repayment: A business is not required to repay capital it obtains through equity financing. Investors usually bet that they will make money through the sale of their stake or future cash flows.	No Profit Sharing: Debt financing allows a business to keep its profits entirely to itself. This is not the case with equity financing where investors eventually become entitled to a portion of profits.
Cash Preservation: Compared to other funding types, equity finance does not cost anything. This allows a business to conserve cash to grow instead of spending it on paying interest.	Independence: Investors in debt financing do not have a say in how a business is run. A start-up or business makes its own decisions on how to work completely in an independent way.
No Interest: As equity financing does not need debt repayment, companies do not have to worry about making interest payments.	Easy Budget Forecasting: Budget forecasting is considerably easier with debt financing as compared to other types of funding. This is because the fixed-rate loan in debt finance means the loan payments do not change and with unchanging monthly fees, predicting future expenses is easier.

Debt Financing Vs Equity Financing– Cons

Take a look at the cons of equity vs debt capital.

Equity Finance	Debt Finance
Profit Sharing: The ownership stake in equity finance entitles investors to a portion of the future profits of a business.	Interest: The monthly interest expenses can be hefty. However, any interest paid on debt financing is tax deductible. In the future, that deduction can outweigh the immediate financial burden.
Loss of Independence: Investors in equity financing are often more involved in a startup or a business. This means if the ownership stake is diluted because of repeated offerings, the business owners may risk losing control.	Liability: Certain debt financing providers might require a business to put assets as collateral. In case of failure to repay the loan, the lender can acquire your assets.
Difference of Opinion: Shareholders and business owners may not always agree on how a company should run. This could cause tremendous strife.	Repayment: Unlike equity capital, you must pay back the money you receive from debt financing. If a company is unable to generate the cash flow needed to service the debt, it may end up defaulting on the business loan.

Why Does a Company Need Equity or Debt Financing: Strategic Applications?

- Working Capital for Daily Operations: Every business, especially early-stage companies are consumers of cash. Equity or debt finance provides the needed working capital required to pay wages and salaries, purchase inventory, or for operating expenses.
- To Purchase Assets: A business may want to purchase assets like plant and equipment, hardware, software, intellectual property, and other long-term assets – to build the business.
- To Finance a Merger or Acquisition: Equity, debt, or a combination of both can be used to acquire another company or line of business.
Access to Multiple Capital Sources: CFOs like access to various sources of capital as diversity in a business’s capital structure strengthens it from the point of view of lenders and investors.

Conclusion

Debt and equity financing are both avenues through which a business acquires much-needed capital or funding. Which one is required, depends on the business goals, need for control, and tolerance for risk. Before you make your decision as a finance leader or a business owner it is important that your financial and investment skills are sharp enough and you have in-depth knowledge of investment banking and financial capital.

Designed and structured to provide professionals with the best investment banking and capital markets knowledge, Imarticus Learning brings to you the Executive Programme in Investment Banking and Capital Markets by IIM Calcutta. This niche initiative refines your existing financial skills by providing strong foundational and advanced learning.

Enroll today to polish your skills, acquire a new vision, and intensify your career in investment banking.

How Can Treasury Management Enhance Business Stability in a Volatile Market?

Posted on January 6, 2025 by Imarticus Learning

Treasury management is crucial in maintaining a company’s financial stability and growth. The field of treasury management includes a wide range of activities, including daily cash flow management, financial risk management, and formulating long-term investment strategies. The right treasury management strategy can successfully optimise the organisation’s liquidity, ensure its financial health, and strategically plan for its future needs.

Keep reading to understand treasury management and how it plays a key role in enhancing business stability in a volatile market by effectively managing financial resources.

Understanding Treasury Management?

Treasury management plays a pivotal role in the financial risk management of a company as it enables a business to optimise cash flow management as well as liquidity for operations and strategic initiatives. This process also ensures effective liquidity management, optimises investment returns, secures and maintains credit lines, and also formulates strategies for the efficient allocation of funds.

The right treasury management strategy supports informed decision-making and helps in improving as well as maintaining financial as well as business stability even in a volatile market.

Treasury Management Benefits – Enhancing Business Stability in a Volatile Market

As mentioned above treasury management helps in minimising financial risks while optimising a business’s financial resources. The benefits are given below.

Enhanced Cash Flow Management

Treasury management improves cash flow management and helps companies become financially agile and resilient. This helps businesses operate effectively, pursue strategic opportunities, and provide returns to shareholders, all while mitigating financial risks. The right cash flow management helps a business to meet its short-term liabilities and use surplus cash efficiently. This helps in reducing the risk of insolvency and enhances a business’s financial stability even in volatile times.

Increased Stakeholder Confidence

Treasury management helps a business develop a strong cash position and liquidity, which are indicators of a healthy business. This increases confidence among investors, creditors, and stakeholders.

Protection Against Financial Shocks

Treasury teams use various strategies like diversifying investments and maintaining buffer liquidity to help a business stay protected against a volatile market and fluctuating interest rates.

Reducing Financial Risks and Associated Costs

Minimising financial risks like credit, market, and operational risks, can reduce costs and provide additional predictability to a business. This plays a key role in planning and decision-making.

Improved Decision Making

By providing timely and accurate financial insights, treasury management can help businesses maximise returns on investments and comply with regulatory requirements.

Better Strategic Planning

Treasury management systems (TMS) and financial modelling tools provide a business with real-time and historical data on cash flows and outflows. This helps in accurately forecasting future cash positions and making informed decisions about the timing and size of investments and borrowings.

Strategies for Effective Treasury Management

To optimise treasury management, companies can adopt the following strategies:

Prioritise Flexibility: Maintaining flexibility in financial strategies can help a business adapt to changing market conditions and business needs.
Foster a Culture of Financial Awareness: Encourage financial literacy and awareness to support informed decision-making among all employees.
Focus on Sustainability: Long-term sustainability consideration in financial decisions while aligning them with environmental, social, and governance (ESG) principles.
Engage in Continuous Learning: Keeping updated with the latest developments in finance, technology, and regulations to enhance treasury management practices.

Conclusion

In a global economy, treasury management plays a key role in managing financial risks. The mounting complexities in conducting business lead to a need for specialised talent to manage risks, optimise returns, and ensure regulatory compliance.

If you want to master new-age financial skills, then the Postgraduate Certificate Programme for Emerging CFOs, a specialised finance program created with IIM Indore is perfect for you. This CFO course offers a comprehensive understanding of financial services and management. This robust program by Imarticus Learning will prepare you for the CFO role by equipping you with strategic, analytical, and tech-focused skills.

CFOs and IPOs: Key Insights for Senior Financial Leaders

Posted on January 6, 2025 by Imarticus Learning

In the rapidly evolving business landscape, companies are increasingly considering the benefits of going public, and the role of the CFO in reaching this milestone is vital. An initial public offering (IPO) plays a pivotal role in supplying capital for private companies looking to grow while also providing much-needed liquidity to investors and employees.

Keep on reading to learn how important is the role of the CFO in IPO preparation of a company and what are some key CFO strategies for IPO success.

IPO Preparation by CFO- Key Responsibilities

The role of the Chief Financial Officer is pivotal when a company is preparing for an IPO. Major IPO preparation by CFO responsibilities include:

Communicating with Investors: The role of CFO when preparing for an IPO includes communicating with investors. The CFO explains the company’s listing, direction, and next step to stakeholders and investors, often through roadshows.
Building Trust: Major CFO responsibilities IPO also include establishing trust with auditors, investors, bankers, stakeholders, and shareholders.
Collaborating with the CHRO: The CFO also works with the Chief Human Resources Officer (CHRO) to create a positive culture that encourages employee engagement and responsible conduct.
Creating a Favourable Image: During IPO preparation by CFO, creating a favourable image of the company is also crucial. The CFO also takes care that the company’s business, activities, management, and performance are always seen in a positive light.

Important CFO strategies for IPO success

For companies that are considering the public markets, the major strategies taken up by the CFO include:

Starting Early: Successful IPOs require 18 to 36 months of preparation in advance of the offering. The role of the CFO and the team during this time is to build the needed capabilities and execute a smooth transition into the public domain.
Carefully Evaluating the Decision to Go Public: Before taking the final step, the CFO must lead a thorough assessment of their companies and the motivation to go public. Not every company or business is suited for life in the public eye.
Consider Regulations and Requirements in Advance: When a company goes public, it means greater transparency and disclosure requirements specifically when it comes to financial and other regulatory reporting. One of the major CFO strategies for IPO success is to prepare for these compliance requirements. It can be done by assessing key systems and processes and addressing any gaps between the current state and the level of performance that shareholders and the SEC expect.
Getting the Right Team in Place: Most of the time companies overestimate their team’s ability to handle the volume and technical complexity of preparing for an IPO. The CFO needs to ensure that the organisation has a resourceful and capable finance and accounting team in place to handle the increased workload post-IPO.
Taking Care of Investor Relations: While the IPO process is ongoing, CFOs and CEOs are the public faces of their firms. This is a golden opportunity for leaders to attract the right investors in the target capital pools. A successful and smooth investor roadshow and a rewarding IPO journey are linked together. A CFO needs to be prepared for tough Q&A and think like an investor throughout the process.

Conclusion

CFOs at companies planning to become public need to be targeted and well-prepared. The Chief Financial Officer needs to work with the in-house teams and advisors while planning way ahead of the transaction to set up the right foundation. To be successful in this journey, the right CFO course can teach leaders to think prudently, shape a high-performing team, and lead growth effectively.

Imarticus Learning brings to you the Chief Financial Officer Programme from the Indian School of Business. This course can help you take your financial leadership skills to the next level. Enroll now to attain the pinnacle of financial leadership.

Jobs after BCom: How Graduates Land Top Roles?

Posted on January 2, 2025 by Imarticus Learning

Finishing a BCom degree is a great achievement; however, for most students, the real question that arises in their minds is, “What’s next?” In this respect, there is an ample number of jobs after BCom in the field of commerce, specifically in the area of financial accounting and management. Career options after BCom are endless, all you need is the right direction and strategic mindset. According to research, there is a strong demand for financial accounting and management professionals in developed markets such as the U.S., Canada, UK, Australia, and parts of Europe due to their robust financial sectors.

This blog will take a deep dive into the jobs after BCom, outlining lucrative roles, required skills, and how advanced training can pave the way for success.

Why Financial Accounting and Management Is Best for BCom Graduates

High Demand by Experts

Newly formulated and an economic world which always keeps the dependence on monetary experts toward their becoming complaint, manages all investments to acquire top-level performance; thus every segment of industrial houses requires personnel proficient in appropriate skills at the financial accounts handling and the related management techniques.

Scope and Employment outside Countries

Finance is the world language and experience in that space is to work anywhere across a financial hub around the globe. New York, London and Singapore are opening unlimited potential avenues for career options after BCom.

Competitive Salaries and Career Opportunities

Finance professionals certainly come with competitive starting salaries along with defined career progress up to leadership positions as the Financial Manager or the CFO.

Flexibility in Application

It is used in sectors related to banking, consultancy, retail, and technology. Those are the reasons this is so much an exciting area of study for BCom graduates.

Best Jobs after BCom

Financial Analyst

Financial analysts study data which enable organizations to make better-informed strategic investment choices. They analyze market conditions, a company’s current and past performance, and the country’s economy to determine where opportunities to invest exist.

Key Responsibilities

Analysing a financial statement
Carrying out an analysis of the market
Analyzing Potential Investments

Skills: Analytical thinking, financial modeling, and data analysis experience.

Salary: ₹5–12 LPA in India and $60,000–$90,000 a year abroad

Accountant

An accountant is the backbone of any company’s finance team. He maintains proper accuracy of the records in financials, handles budget, and keeps the company away from tax-related problems.

Key Responsibilities

Formulation and submission of financial statements

Handling budget

Tax compliances and return

Skills: Highly skilled in Tally, QuickBooks, MS Office etc tax and billing-related software programs.

Salary: ₹3–₹6 LPA in the country and $50,000–$80,000 Per Ann outside countries.

Budget Analysts

Budget Analysts form a very crucial part when considering how funds are being managed in a concern. They create and work on budgets to remain productive financially.

Key Responsibilities

Analyzing spending trends.

Measuring financial needs.

Developing cost-saving measures.

Skills: Strong mathematical and analytical thinking, knowledge of budgeting tools.

Salary: ₹4–8 LPA (India); $70,000-$100,000 per year abroad.

Financial Manager

Financial Managers are the guardians of financial welfare of an organization; they prepare long-term financial planning and risk management.

Key Responsibilities

Development of financial policies

Risk forecasting and management

Management of financial teams

Skills: Leadership, decision-making, and knowledge of financial reporting tools.

Salary: ₹10–15 LPA (India); $90,000–$120,000 per year abroad.

Tax Consultant

Tax Consultants advise business organizations and persons with regard to their tax planning having tax laws properly observed while maintaining liability to a minimum.

Key Responsibilities

Assist in preparing the tax return

Advise them of the possibility of tax saving

Assist and perform audit and compliance requirements

Skills: Basics in tax law, analytical ability and keen attention to detail

Salary Package: ₹5-10 LPA in India; $70,000-$100,000 annually overseas

Career Paths After BCom: How to Get That Dream Job

Step 1: Stronger Foundation

BCom will give foundational learning about accounting, business management, and finance. Then, taking it further with more emphasis on the current industry trend and skills toward practical capabilities.

Step 2: Knowledge about Industry Specific Tools

The most important tools which would help you move further up the ladder in your career would be industry-specific tools, for instance, Tally, Power BI, QuickBooks, and Excel.

Step 3: Further Training

Advanced training programs like the postgraduate financial accounting and management course make you job ready via practical learning and industry inputs.

Step 4: Network Effectively

Network with professionals, attend career fairs, and take up internships to help you find opportunities and mentors in your chosen field.

Financial Accounting Jobs after BCom: The Role of Specialised Training

Besides employability, it provides specialised training, industry exposure, and placement support with practical skills. Imarticus Learning’s Postgraduate Financial Accounting and Management Program meets the needs of a finance professional today.

Why Imarticus Learning’s Postgraduate Financial Accounting and Management Program?

The Postgraduate Financial Accounting and Management program by Imarticus Learning is an all-inclusive course designed to help BCom graduates get a competitive edge in the finance sector. Having a history of ensuring that students are given the right skills, industry insights, and guaranteed job opportunities, this program is the doorway to top financial accounting and management roles.

Key Features of the Program

Job-Guaranteed Training

The course offers 100% job assurance with 7 guaranteed interviews so that each learner gets sufficient opportunities to start his career.
Graduates are paid an average starting salary of ₹4 LPA and have a 60% potential hike in salary, making them among the top-earning individuals in the industry.

Industry- Relevant Curriculum

Curriculum is so designed to cover all the key areas of financial planning, compliance, budgeting, and advanced reporting.
Students are trained in hands-on experience using tools like Tally, Power BI, QuickBooks, and MS Office, which is part of the job roles.

Practical Learning with Real-World Applications

You will have hands-on learning experience through finance simulations and case studies so you’re ready to face real-world challenges.
The program involves leading-edge technology so that learners can analyse data and make the right decisions.

Expert-Led Instructions

Learn directly from the industry veterans and finance experts with an average 15+ years of experience. From them, the students learn actionable inputs and become better equipped in demanding roles.

Placement and Career Counselling

The knowledge transfer does not stop there for the programme; it carries on into extensive placement support in regards to interviews, resume preparations, and soft skills counselling.
This huge network of more than 1,000 hiring partners from Infosys, Accenture, HCL, and Wipro will ensure that the students are best presented with opportunities.

Flexible learning options

The program caters to both students and working professionals with a need for flexibility without compromising on the quality, through this 3 months weekday learning format as well as 6 months weekend learning format. A legacy of excellence
This is a testament to the great commitment of Imarticus Learning to excellence and innovation as it was chosen to receive the Best Education Provider in Finance award at the 30th Elets World Education Summit 2024.

Transform your career with Imarticus Learning.

The Postgraduate Financial Accounting and Management Program is much more than a course; it is a career-transforming experience. Whether you would want to work closely with the CFOs, to lead financial initiatives or propel organisational growth, this program will certainly help you prepare to succeed at such a role.

FAQs

What is the highest paying job after BCom?

Some of the in-demand ones are Financial Analyst, Accountant, Budget Analyst, Financial Manager, and Tax Consultant.

How to get an accounting job in finance?

You can get high-ranked jobs with proper specialised training, acquiring hands-on experience, and enriching your networking.

Why is a Financial Management Course important?

A financial management course fills the gap between theoretical knowledge and practice and helps you to be a job-ready candidate.

What is the salary range for BCom finance graduates?

In India, the range goes from ₹3–15 LPA to $50,000–$120,000 in other countries.

What does Imarticus Learning offer to BCom passouts?

Imarticus Learning offers job-assured training, industry-relevant skills, and placement support, therefore ensuring a successful career for all passouts.

Conclusion

This BCom degree opens the highest way into finance. So many upskilling and networking opportunities occur from the get-go. For instance, postgraduates are offered courses, such as Postgraduate Financial Accounting and Management Course, enabling them to become assured and skilled in all competencies leading towards the best of the best of financial accounting and management.

Get moving today and unlock your true potential in the finance world. That dream job is just one step ahead!

Discover Career Options After BCom: Your Path to Success!

Posted on January 2, 2025 by Imarticus Learning

The journey after completing BCom opens a gateway to numerous opportunities in finance. Among the most promising paths are financial accounting and management, essential to businesses across industries. These fields offer dynamic roles with high growth potential and

According to research, financial accounting and management professionals are essential in various sectors, including corporate finance, public accounting, banking, and consulting. Senior roles in this field can earn between $150,000 to $300,000, depending on the organisation and location.

In this article, we dive into the top career options after BCom, explicitly focusing on financial accounting and management. We will also learn about courses like the Postgraduate Financial Accounting and Management Program, which can significantly impact your journey to success.

Career Options After BCom in Financial Accounting and Management

What Career Options Are Available After BCom?

BCom graduates attract a lot of opportunities, but financial and accounting management specialisations are always in great demand. Let’s see some of the most exciting prospects in this field:

Financial Accounting Career Opportunities

Chartered Accountant (CA): Specialisation in Auditing, taxation and planning. CA is one of the most respected careers in finance.
Certified Public Accountant (CPA): Best fit for students seeking global opportunities in financial accounting.
Accounts Payable/Receivable Manager: They manage the financial transaction process so that the liquidity in the organisation is intact.
Forensic Accountant: These accountants analyse the fraud and financial anomalies to ensure compliance and integrity.
Financial Analyst: They use data to inform investment choices and business strategy.

BCom Career Scope in Finance

Financial planner: Design customised financial planning for individuals and companies.
Corporate finance executive: Managing an organisation’s budgets, forecasts, and funding.
Banking Professional: Working with either credit analysis, wealth management, or risk assessment.
Auditor: Review the financial situation of an entity and determine if it adheres strictly to the rules laid out.
Tax Consultant: Advise the client regarding taxation, ensuring optimal tax strategies.

Exploring Financial Management Courses for BCom Graduates

Why Pursue a Financial Management Course?

With courses like finance management, you are better prepared in fields like knowledge about budgeting and particular skills of real-life experience in investment planning and strategic decision-making of finances. Of course, these are but some of the benefits waiting for you:

Greater employability
Practical exposure to financial tools and technologies
Awareness of global financial trends

Key Features of the Postgraduate Financial Accounting and Management Program

Comprehensive Course Structure: Fast track career with a 100% job guarantee.
Learning through Practical Approach: Knowledge of financial tools used in the best organisations.
Track Record of Success: 1,000+ hiring partners; graduates’ mean salary growth is 60%.
Global Insights: Inculcation of financial management‘s economic, technical and institutional underpinnings.

Benefits of Joining Financial Management Programs

Industry Relevance: Gain insights into current industry practices.
Skill Development: Develop analytical, management, and decision-making skills for finance jobs.
Professional Development: Better career up-gradation through professional training and certifications.
Networking Opportunities: Connecting with industry leaders, peers and hiring partners for better career prospects.

Industry Insights into Financial Accounting and Management

The Role of Financial Accounting

Financial accounting enables the stakeholders to provide important updates about economic health. The primary activities carried out are:

Recording financial transactions.
Preparing financial statements.
Ensuring regulatory compliance.
Supporting decision-making through accurate financial reporting.

Why Financial Management?

Financial management comprises planning, organising, and controlling financial resources to achieve organisational goals. The main functions are:

Budgeting and forecasting.
Investment analysis.
Risk management.
Maximising shareholder value through strategic financial planning.

Growing Demand for Financial Experts

The business trend modernises slowly towards globalisation, wherein the need for financial specialists in accounting and management goes more rapidly. Included amongst the front-runners on this move are sectors such as:

Corporate finance.
Banking and financial services.
Consulting firms.
Public accounting.

Future Trends in Financial Management

Technology Integration: Automation and AI are transforming financial processes.
Data-driven Decision Making: Increased reliance on analytics for strategic planning.
Sustainability Reporting: Companies are prioritising environmental and social governance.
Globalisation: Increase in roles & responsibilities with cross-border financial activities.

How to Build a Successful Career in Financial Accounting and Management?

Essential Skills for Financial Careers

Analytical Thinking: Solution to the most complicated of financial problems based on data
Technical Expertise: Information on software of accounting and tools and methods used in finance.
Communications Skills: Clear conveyance of financial information to stakeholders.
Leadership Qualities: Head groups and guide businesses to deliver the results.
Detail-oriented: Accuracy and attention in reporting and in financial reporting

Steps to Kickstart Your Financial Career

Gain a Strong Educational Foundation: Finish BCom with majoring finance
Pursue Specialised Courses: Enrol in programs like the Postgraduate Financial Accounting and Management Program.
Obtain Certifications: Acquire credentials like CA, CPA, or CFA to enhance your profile.
Build Practical Experience: Intern or work in financial roles to gain real-world exposure.
Stay Updated: Keep up with financial regulations, technologies, and industry trends.

FAQ

What are the best career options after BCom?

This will encompass financial accounting, management, auditing, and financial planning jobs. The prospects will be enhanced with a specialised certification of CA, CPA, or a postgraduate program.

Why is financial accounting a good career option after BCom?

A financial account provides stability, growth, and higher wages; therefore, most industries necessitate it, making it very flexible as a career.

How does the Postgraduate Financial Accounting and Management Program help BCom graduates?

The program consists of work experience in the industry and provides a guaranteed job to BCom students, which prepares the Bcom graduate for an impactful finance career.

What is the salary potential in financial management careers?

Starting salaries average around 4 LPA, with senior roles offering $150,000 to $300,000 annually, depending on expertise and location.

Can one pursue online courses on financial management?

Yes. Many institutions are providing live session online programs. It can be managed with working professionals’ schedules, such as Imarticus.

Conclusion

BCom has excellent scope in financial accounting and management. It goes from chartered accountancy to economic analysis and is well-paid. When you choose a postgraduate course, it’s something like the Postgraduate Financial Accounting and Management Program, which can help improve your skills with subsequent potential for enhancing the salary scale and thus setting up an auspicious career for yourself.

The financial world is constantly changing; therefore, there is a need for professionals to have the proper knowledge and skills. With that in mind, let’s enrol in that financial management course that addresses our career aspirations. The time to take the great leap forward has finally arrived!

Importance of Financial Services in Modern Economy

Posted on January 2, 2025 by Imarticus Learning

In today’s fast-paced global economy, the importance of financial services is irreplaceable. Financial services are the pillars that keep up the economic stability and growth. It is seen as a boost by supporting the business, government, and people by giving them strong motivation in all sectors.

Financial Services & Capital Markets professionals make $60,000 to $90,000 a year abroad. Growth and innovation in every sector will be encouraged with proper management of resources and facilitating investment.

This article talks about the importance of financial services, changes in economic landscapes, and right education that leads professionals to thrive in this particular field, similar to IIM Lucknow Advanced Management Programme in Financial Services & Capital Markets.

What are Financial Services?

Financial services include banking, insurance, investment management, and capital markets. It acts as an intermediary between the saver and the borrower in utilising resources appropriately. The primary institutions in the financial sector are banks, credit unions, and insurance companies.

Characteristics of Financial Services

Banking Services: Loans, savings accounts, and payment systems.
Insurance: Risk cover for the individual and firm.
Investment Services: Stocks, bonds, and mutual funds for asset growth.
Capital Markets: This is the critical part since they promote business growth and the development of the economy.

Role and Importance of Financial Services

Boosting Investment and Innovation

Financial services are very instrumental in providing investment ideations. Entrepreneurs kick-start businesses due to great ideas and access to the capital due to several innovative financial services. Tools like advanced technological advancements and AI are aimed to increase employment and boost businesses.

The role that financial services play as a result of the access to capital by the entrepreneurs where it kick-starts businesses that are aimed to develop employment as well as introducing new technologies.

Enhancing Economic Stability

Financial systems offer sufficient stability through risk management and liquidity in the economic downfall. Insurance covers loss while banks can offer lines of credit for ailing businesses.

Enabling Global Trade

The reason smooth financial services exchange contributes so largely to much globalisation is cross border transactions. Foreign direct investments and trade financing assist in countries doing well in interdependent economies.

Promotion of Personal Wealth

Financial services are meant to manage the riches in an effective way. From retirement planning, to education loan, and even insurance, here are some of the many services of financial security relating to social mobility.

Financial services and economic growth are interwoven!

Economic growth and financial services are interdependent. An efficient financial system will accelerate the growth of GDP through savings mobilisation, resource allocation, and encouragement of entrepreneurship. Higher economic growth would, in turn, drive up demand for the diverse array of products of financial services and spur innovation within the sector.

Case Study: India’s Digital Banking Revolution

Digital banking in India emerges as an epitome of how financial services spur economic growth. For example, consumption and economic activity are promoted through financial inclusion caused by schemes such as UPI.

Challenges to the Financial Services Industry

The industry that forms one of the very important growth drivers still has many challenges

Compliance to Regulation

Much stability requires regulation; however, at specific points it’s going to bring in rigidity that would delay innovation and flexibility of this sector.

Technological Disruption

Fintech has indeed disrupted the old financial sector. There’s an opportunity within them and getting adjusted to it is the key investment.

Global Economic Uncertainty

The COVID 19 reveals the vulnerability of the present financial system if there is any external impact. That is what institutions would have to carry out in preparation for such issues.

Importance of Education in Finance Services

This dynamic industry requires professional knowledge and skills. Advanced classes give a person expertise in digital banking, risk management, and capital markets.

Why IIM Lucknow Advanced Management Programme in Financial Services & Capital Markets?

Comprehensive Curriculum

The IIM Lucknow Advanced Management Programme in Financial Services and Capital Markets gives a holistic view of all the topics such as corporate finance, valuation, and treasury operations. The programme is future-focused with inputs on both the conventional and new areas in finance.

Renowned Faculty

The participants will be led by the experienced faculty members who are renowned in terms of academic excellence as well as practical insights

Networking Opportunities

It includes professional working experience and provides peer learning along with alumni working in the best companies like Deloitte, HSBC, and Infosys through which it offers matchless networking opportunities

Campus Immersion

A five-day immersion in the campus at IIM Lucknow enables industry insights through direct interactions from the faculty and peers.

Industry Relevant Pedagogy

Combination classes done online along with industry master classes besides these, capstone projects in themselves allow for a completely inclusive course. Thus, this system prepares the participants to tackle realistic problems.

FAQs

What is the importance of financial services?

Financial service guarantees efficient utilisation of resources; it assures sufficient rationing that brings forward sound finances hence allowing individuals and businesses growth based on the financial services end.

How do the contributions of finance services impact economic growth?

These facilitate investments, introduce innovating opportunities, enhance international trades, and provide tools to wealth management that further enhances the economy by increasing GDP.

Why are the IIM Lucknow courses ideal for finance professionals?

Courses of IIM Lucknow have blended curricula, faculty having vast experience, and hands-on learning methodologies to bring successful professional outcomes in management areas.

Important features of the IIM Lucknow Advanced Management Programme in Financial Services & Capital Markets are:

The programme includes a forward-looking curriculum, campus immersion, industry-relevant pedagogy, and a focus on peer learning.

How do I advance my career in financial services?

Advanced courses like IIM Lucknow Advanced Management Programme in Financial Services & Capital Markets can provide valuable knowledge, skills, and networks for pursuing career advancement opportunities, like IIM Lucknow Financial Services Programme.

Conclusion

Financial services manages your wealth & boosts economic growth and stability of any region while introducing innovations. So, professional courses like IIM Lucknow Advanced Management Programme in Financial Services & Capital Markets bring forth changes that will lift an individual to the topmost levels in that space.

A strong program coupled with excellent faculties will breathe new life into such a finance career and prepare its owner to be fit for work as a leader. Learn how financial services make the world, and take this opportunity to refresh your knowledge and get a specialised education. The future of finance awaits ahead!

How to Choose the Right Investment Manager for Your Financial Future

Posted on January 2, 2025 by Imarticus Learning

A right investment manager is what makes all the difference when handling one’s finances. After all, it’s not simply a matter of picking stocks and bonds; this is purely about securing your future financially. In this sea of choices, what do you do? Which person do you select to guide you in navigating this somewhat complex world?

Let’s consider all the main aspects that go into the decision-making process.

What Exactly Does an Investment Manager Do?

It will be better to know what actually an investment manager does before getting started on your search. By far, the simplest definition is that they take care of your investments for you. This can be allocating investments, managing risk, and executing various portfolio tweaks to meet your goals. They also monitor markets, adjust strategies, and keep you up to speed on performance.

Choosing the right investment manager is everything.

The selection of the appropriate investment manager cannot be a more sensitive decision. It can be seen as the selection of a captain for your financial voyage. A good investment manager will navigate you through choppy waters, minimise risks, and lead you to your financial goals. A bad choice can waste these opportunities and low returns for years, so make sure to get it right.

Key Qualities to Look for in an Investment Manager

The following are the qualities you need to consider when it comes to choosing an investment manager:

Experience and Expertise

After all, experience goes a long way in the investment management world. A seasoned manager who’s gone through various cycles is much more likely to make informed decisions that will protect and add value to your investments. Of course, there are no absolute guarantees in investing, but far more people with a good track record are likely to navigate their way through downturns and capitalise on opportunities that arise.

Clear and Transparent Communication

A top-grade investment manager does not only make decisions and leaves everything to the client. Communication, in fact, is their first principle. Their goal should be to explain clearly their strategies to you, to inform you about the risks that are associated with it and to update you on how your portfolio is performing. This means that the more transparent they become, the more confident you become in their decisions.

Alignment with Your Financial Goals

Not all investment managers are alike. Their investment strategies may have one focus on long-term growth and others on short-term returns. For a good and effective investment manager, it is well noted that time spent understanding your special financial objectives or goals—to save for retirement, buy property, or grow your wealth—will be wisely spent.

A Solid Risk Management Strategy

In fact, investing always carries an element of risk. However, a good investment manager would weigh up these risks and develop strategies to protect your capital. Sometimes it would appear in the form of diversifying a portfolio and spreading investments across different sectors or regions to avoid putting eggs into one basket.

Reputation and Trust

Trust is the cornerstone of any financial relationship. Look for investment managers who come highly recommended by others. Check their reputation—both online and through word of mouth. You want someone who’s known for making smart decisions, being reliable, and keeping clients happy.

Proper Credentials

On the credentials side of things, be sure that your investment manager is licensed and regulated appropriately through your financial authorities. Being Chartered Financial Analyst ‘certified’ marks someone as a trustworthy professional with a high degree of expertise in their subject. Verification of credentials can be a good precaution before making decisions.

Watch the entire video for ultimate CFA preparation roadmap

What Types of Investment Management Services Should You Expect?

Investment management services differ depending on the manager and your needs. Some might keep an eye over the entire portfolio, while others might be more specific for advice on certain investment types. These are some common services to look out for:

Active vs Passive Management

Active managers can be likened to the go-getters of the investment world: always analyzing, picking and choosing stocks, and looking to make trades in efforts to outperform the markets. Passive managers take on a more laid-back role, sticking to strategies such as the tracking of a market index, letting your investments sit there and grow steadily through time without frequent trades being made.

Discretionary vs Non-Discretionary Management

Discretionary management is like hiring your own personal shopper when it comes to your investments. All decisions are taken on your behalf so you do not really need to worry about the nitty-gritty with that kind of management. However, in non-discretionary management, you are still in the driver’s seat for you might get advice and recommendation on the managers but the final call is always yours.

How to Evaluate an Investment Manager

Be intricate while doing diligence on an investment manager. Below are a few actions that you may take to ascertain the right choice:

– One-on-One Meeting: Direct meetings with prospective managers are very important. This is where you will get to ask each of the prospective managers about their experience in their handling of their clients’ investments, how they approach risk management, as well as how they have performed in different market conditions. The conversation will mostly tell you if they are the right match for you.

– Review Performance: Historical performance is not necessarily a strong predictor of future performance, but it can give you an idea of whether there has been a consistent approach to handling different market conditions. Request detailed performance reports to check for evidence of consistent performance over time.

– Ask about the process: Every Investment Manager has a unique process or instinct. So, they will tell you the process in detail. For instance, their approach toward picking investments, and deciding when to buy or sell would be important points to discuss. Would these be aligned with your own investment goals? – All these would give you a better picture of their approach toward buying and selling.

Finding the Best Investment Managers for Your Needs

So, how do you approach finding the best investment managers? You are looking for people with a good reputation and who have had good reviews and proven track records in investment management of funds that would align with your goals. The Chartered Financial Analyst program provides one of the best sources for the most skilled investment managers.

Investment Manager vs Financial Advisor: What’s the Difference?

Both roles help meet a particular end in terms of pursuing some financial goals. On one hand, an investment manager should strictly be concerned with just managing investments. However, a financial advisor would extend advice on retirement planning, tax strategies, as well as estate planning.

Getting Started with Your Investment Manager

You have finally chosen the investment manager; what next? Restore everything from the get-go. Agree on things such as the frequency of your meetings, the information you will receive, and your fee structure. The relationship will be ideally transparent and open for you to be confident in the decisions they take.

The Importance of Financial Education

It might interest the curious learner who is interested in new concepts and desire to have a limited level of investment sophistication in understanding finance to be attracted by courses such as the Chartered Financial Analyst (CFA). The principle of investing must be taken into account when making decisions and choosing an investment manager suitable for cell growth. If you are interested in get the CFA charterholder than choose the India’s 1st and only Authorised Prep Provider for World’s Top 4 Certifications in Accounting & Finance including CFA Course.

FAQs

How do I know if an investment manager is right for me?

It is important for any manager who is right for you to study what it is you intend to achieve financially, clear communications, and a proven track record.

What should I expect from my investment manager?

You should expect regular updates, transparency regarding their strategies, and a tailored approach that aligns with your goals.

Can an investment manager help me plan for retirement?

Yes, an investment manager will develop a strategy designed to meet your long-term goals, including retirement savings.

Conclusion

Among many things that can be done to secure your financial future, choosing the right investment manager tops the list. Factors such as experience, communication, and adherence to your goals should all weigh into your decision. Take your time, ask the right questions, and remember-it’s a relationship that goes both ways. A good investment manager will help one learn through it all and keep the person in alignment with his or her financial dreams.