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Multi Manager Approach Versus Portfolio Manager Approach Explained

There are two types of wealth management approaches: Multi Manager and Portfolio Manager.
Typical Multi Manager Approach:

MPW transaction process

Typical Portfolio Manager Approach
(used by Montag Private Wealth):

MPW transaction process

The multi manager approach is often used by large pension and institutional funds as well as by large bank private wealth and financial advisors who use it for their high-net-worth clients. According to the multi manager approach, a specialist manager in each asset class is hired to manage the portfolio. The belief is that a specialist portfolio manager can enhanced performance and reduce risk compared to a generalist.

For the portfolio manager approach, clients elect to have one or two managers oversee the risks of their total portfolio based on the size of their investable assets. Clients with larger investable assets will often seek to diversify with two portfolio managers. For the portfolio manager hired, this will involve managing the assets’ mix risks, the duration/interest rate risks for the fixed income, and the sector and industry risks as well as the security-specific risks for equities.