When it comes to investing in the current landscape, you don’t have a lot of alternatives. More and more banks are starting to either close up shop or merge, and when you think about the chances of doing it all by your lonesome, it either gets too costly in dollars or too costly in terms of time. What the tried and tested strategy is in the current landscape is to find partners in an investment firm who specialize in investments as their every day focus. While there may be some reasons that individual investors here and there would choose to go another route, these are the reasons that investors have been flocking to investment firms as of recently.
Various Legal Reasons
When it comes to trying to invest on your own, you are extremely limited in what your cash is. However, due to economies of scale the major players are able to not only spread out the costs of licensing, brokerage fees, trading costs, and etc., they are also able to receive the professional advice that a major company can receive. The economies of scale simply mean that they can do more because they have more, and overall all of that can be done on a lower per cost basis than if you were to do it all by yourself.
Access to Options
If you go on an individual trading platform fortune.com hinted your asset purchases and overall options (bells and whistles to invest in) are limited. However, if you deal with a financial fund and group of investors that have a seat at the table, then you can gain access to trading multiple different investment vehicles. This is even more exciting when you realize this means you can trade almost anything, any where, and on virtually any market as well. If you are interested in a specific type of trading system or if you just like the idea of a given commodity or asset, then you have a much easier chance of obtaining those assets with a bigger trader.
History of Professionalism
As Steve Murray, the former President and CEO of CCMP Capital, used to say, “People before Profits.” The idea is that you need to partner with a larger institution solely because they know how to communicate effectively and can do it consistently as well. It is extremely important to understand the world of finances, but it is even more important to be able to communicate that information to the people you are working with and representing. Steve Murray believed that you could continue to spin your wheels going after small amounts of money, but the key to building portfolios that generate wealth on both ends is all about building relationships with the portfolio holders.