When families begin working with us, I emphasize that our team personally manages their money – we do not outsource. I believe this direct involvement is crucial when deciding whom to trust with your investments.
Many financial planning firms separate the planning function from investment management: advisors build the plan, and a third-party money manager or model handles investments. At Great Lakes Private Wealth, we prioritize active investment management, with financial planning built around it. For families focused on preserving wealth, this structure may lead to more responsive portfolios when conditions shift.
What Active Investment Management Means in Practice
Active investment management generally means a real person is monitoring your portfolio with your specific situation in mind, making adjustments based on current market conditions, your tax picture, and life changes. A structured, research-driven process evaluates what is happening and determines whether action is warranted, rather than following a predetermined formula regardless of context.
Why Hands-On Wealth Management Matters During Volatility
Markets do not move in straight lines. Periods of volatility create conditions in which the structure of a portfolio and the judgment of its manager may matter considerably more than in calm markets.
Some automated or model-based approaches follow predefined rules. A hands-on approach assesses whether current conditions warrant changes in positioning, risk exposure, or sector allocation. This flexibility doesn’t guarantee better outcomes but allows for informed judgment rather than preset rules.
For families with significant assets, the implications of a portfolio drifting through a difficult period without active oversight may be particularly meaningful when income is being drawn rather than accumulated. A retiree drawing income from a portfolio has a different recovery timeline than someone decades from retirement, which is one reason active oversight during volatile periods tends to be a more relevant consideration for the families we work with.
The Role of Tactical Portfolio Strategies
Tactical portfolio strategies are used to make deliberate, short-term adjustments to asset allocation in response to current market conditions while keeping long-term goals in focus. The core role of these strategies is to introduce flexibility within an overall investment approach, allowing portfolios to adapt to changing environments without abandoning their original objectives.
Strategic allocation sets long-term asset targets. Tactical allocation considers near-term conditions for possible temporary adjustments. A CFA-informed approach emphasizes systematic, research-driven analysis, not speculation.
Markets typically move in cycles, and no one can predict every turn. What a structured process can do is evaluate current conditions with discipline and make informed decisions about whether the evidence supports staying the course or making a measured adjustment. Staying engaged with a portfolio’s strategy throughout the year, rather than reviewing it only at year-end, supports ongoing evaluation.
What CFA Portfolio Management Looks Like for Families
For high-net-worth families, portfolio management by a CFA could mean that investment decisions made on their behalf are grounded in rigorous analysis of securities, economic conditions, and portfolio construction principles that the CFA program focuses on.
It also means the advisor managing the money has met a demanding standard for professional ethics and accountability. The CFA Institute’s ethical standards require charterholders to put client interests first, maintain independence in their analysis, and disclose conflicts of interest. For families evaluating advisors, those commitments are worth understanding as a baseline of what the credential requires.
We manage client portfolios using our proprietary process. We do not delegate this responsibility. If the portfolio needs attention, we handle it. That is the role of a money manager first.
Feel free to reach out to discuss what active portfolio oversight might look like for your family’s specific situation.
What to Do Now
Families evaluating their current investment management relationship may benefit from asking a few direct questions.
- Consider asking who manages your portfolio. Ask whether the advisor you meet with is the same person making the day-to-day investment decisions, or whether those decisions are delegated to a model or third-party manager. The answer may change how you evaluate the relationship.
- Understand the process. Ask your advisor to describe the process they use to evaluate whether your portfolio needs adjustment during periods of volatility. A clear, structured answer suggests an active approach. A vague one may suggest a more passive tone.
- Review how frequently your portfolio is monitored. Active investment management means ongoing oversight, not quarterly check-ins. Consider whether your current arrangement reflects that level of attention.
- Evaluate whether your advisor holds credentials aligned with investment management. Understanding the credentials your advisor holds and the requirements they have may help you assess the depth of their investment expertise.
- Assess whether your plan and portfolio are managed as a coordinated whole. Families whose financial planning and investment management are handled separately often experience coordination gaps that become apparent at the worst possible moments.
Frequently Asked Questions
What is active investment management?
Active investment management is the practice of making ongoing, research-driven decisions about a portfolio’s composition and positioning to respond to changing market conditions and individual client circumstances. It involves a real person monitoring and adjusting the portfolio rather than following a predetermined, rules-based model.
How does CFA portfolio management differ from standard financial planning?
Most financial planning firms focus on building a financial plan and then delegate investment management to a model portfolio or third-party manager. CFA portfolio management means the credentialed advisor is directly responsible for analyzing and managing the investments. For high-net-worth families, that distinction may be relevant to how their portfolios are monitored and adjusted over time.
What are tactical portfolio strategies?
Tactical portfolio strategies involve making deliberate, shorter-term adjustments to a portfolio’s asset allocation based on current market conditions, while maintaining alignment with the client’s long-term investment goals. They represent one component of an active management approach that evaluates whether near-term evidence supports staying the course or making a measured adjustment.
Why does active management matter during market volatility?
During volatile periods, the ability to evaluate current conditions and make informed adjustments may be more consequential than during stable markets. Some automated or model-based approaches follow predetermined rules regardless of context, whereas active management enables judgment-driven responses to changing conditions. Past performance of any approach is not indicative of future results, and no investment strategy can guarantee protection from market losses.
Key Takeaways
- Active investment management means a credentialed professional directly monitors and adjusts your portfolio based on current conditions and your specific situation, rather than following a predetermined model.
- Tactical portfolio strategies involve shorter-term adjustments to asset allocation based on market conditions, evaluated through a structured analytical process rather than intuition or speculation.
- For high-net-worth families in or approaching retirement, the distinction between active and passive portfolio oversight may carry more weight than during the accumulation years.
Understanding who manages your portfolio, what process they follow, and what credentials they hold is a reasonable question to ask in any advisory relationship.
TL:DR Active investment management through a CFA-trained advisor means your portfolio is monitored and adjusted by a credentialed professional with a structured, research-driven process, rather than a model or third-party manager. For high-net-worth families in or approaching the preservation phase of wealth, that level of hands-on oversight may be particularly relevant during periods of market volatility. Past performance of any investment approach is not indicative of future results, and no strategy can guarantee protection from market losses.
