An intelligent hedge fund investment will use a client's risk profile as a screen against products that do not comply with the investors' investment objectives. That desire for strong performance is accompanied, in most cases, by higher risks. The most sound approach to hedge fund investing builds on the client’s risk profile as a screen against products that do not impose controls that meet the profile.

Independent third-party hedge fund financial advisors strive to deliver certain advantages with this philosophy:

• A risk-based focus forces more in-depth due diligence analysis and consideration of multiple standard hedge fund practices, including the feasibility of achieving more significant gains through leverage and both global and granular consideration of hedge fund investment targets

• Incorporation of both technology and personal industry knowledge to source and identify hedge fund investment opportunities that have not yet gained traction in the investment community

• Participation in hedge fund investment recommendations by analysts and consultants with experience in different channels of every organization, including finance, legal, operations, and management.

The most successful independent third-party hedge fund financial advisors have created in-house structures for hedge fund analysis that address the specific goals and requirements of individual and institutional investors. As with all of the best wealth management services, the investor’s plan for wealth maintenance and creation is the starting point for all investment. Working closely with each investor, an independent third-party hedge fund financial advisors will define the investor’s goals for multi-generational growth, regular income, and risk reduction and match hedge fund investments that deliver liquidity, optimum returns, principal protection, or other elements that the investor’s plan is designed to achieve.