CHAPTER 3Writing for Intermediaries

Some investors are self‐sufficient. But many—both private and institutional—seek the guidance and counsel of intermediaries, by which I mean advisors and consultants, to navigate a broadening and increasingly elaborate universe of investment options.

Who are these intermediaries? In the United States, for example, they span three categories:

  1. Financial advisors, who serve individuals on behalf of such institutions as wealth management firms, private banks, and broker/dealers
  2. Registered investment advisors, or RIAs, who serve individuals independently and run their own practice, or who are part of an independent practice
  3. Institutional investor consultants, who advise government and corporate sponsors of employee retirement plans, endowments, foundations, insurance companies, sovereign wealth funds, and others

The role of intermediaries is to help investors achieve their objectives. As facilitators, they help their clients formulate investment strategies, allocate money to appropriate assets, and manage risks. As gatekeepers, they evaluate investment management firms to tap for their client, cull funds on offer in the marketplace and vet them for quality, and maintain lists of recommended managers on the basis of track records and the clarity with which those managers convey the attributes and potential risks of their funds. Many advisors and consultants also act as fiduciaries and may make investments on their clients' behalf.

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