You have probably heard it before—“Just buy land.” Or maybe you have been told to throw some cash into a Sacco, buy shares, or trust a relative to “do something smart” with your money back home, especially if you live abroad.
But as more Kenyans seek to save more, and dream bigger, a silent question keeps creeping in: Am I investing wisely—or just winging it? Turns out, most of us are winging it.
While over 60 percent of Kenya’s wealthy rely on professional fund managers to handle their investments, only about 15 percent of the middle class—including many in the diaspora—do the same.
According to Timothy Macharia, the Head of Wealth Management at KCB, this gap is not just a statistic, it reveals a deeper issue surrounding financial literacy, risk awareness, and the long-term costs of self-directed investing.
Who is a fund manager and why does it matter?
“A fund manager is sometimes a person or an institution that professionally does investment analysis and makes investment decisions. They manage funds, allocate investments, analyse and identify opportunities that they can invest in and when they invest, they can get some returns,” he says.
This isn’t just someone putting money in stocks or savings accounts. Fund managers conduct high-level market analysis, stay ahead of policy changes and monitor the economic indicators that most casual investors might miss.
KCB Head of Wealth Management, Timothy Macharia, during an interview at his office at Kencom House, Nairobi on April 17, 2025.
Photo credit: Wilfred Nyangaresi | Nation Media Group
Mercy Mwelu, the Head of Business Development at Jubilee Asset Management, distinguishes between do-it-yourself (DIY) investing and the work of professionals.
“A fund manager makes investment decisions on behalf of clients, actively allocating assets to optimise returns while managing risk. Unlike doing it yourself where you invest based on personal research and maybe a gut feeling, a fund manager relies on deep market analytics, macroeconomic insights, and institutional tools to navigate complexities that can go unnoticed by individual investors,” she says.
As a layer of protection and credibility, these managers are licensed by the Capital Markets Authority (CMA), an important aspect that Mr Macharia highlights. However, even within these licensed entities lies the portfolio managers, who act as the boots on the ground responsible for the day-to-day manoeuvring of client investments.
Alfred Mathu, a Financial Advisor at Absa Life Assurance, points out their institutional role.
“An institution that manages the investment of a portfolio of securities on behalf of either individuals or corporate entities,” he says, “The fund manager will help to reduce tax liabilities and maximise on tax benefits.”
A common myth is that fund managers are only for the wealthy. But these professionals say that is not entirely true.
Ms Mwelu believes that younger and first-time investors stand to gain the most from professional guidance.
“First-time and younger investors often benefit the most because they’re still building knowledge and financial habits. A fund manager can provide the structure while they learn,” she explains.
“Like in Kenya, where fixed income fund structures can shift because of simple policy changes and liquidity events, having a professional adjust your exposure in real-time can make a real difference.”
Mr Mathu agrees, saying, “Anyone can benefit from the services of a fund manager as long as you have funds to invest and a clear investment objective.”
However, he notes that in practice, a large share of clients remain high-net-worth individuals. “I would say 85 percent are high-net-worth individuals. You will need a fund manager when you have built a sizeable portfolio, say Sh10 million and you are now starting to think of growing it in a more structured, secured and appropriately diversified manner.”
Tech vs expertise
With the rise of robo-advisors, investment apps and automated platforms, many people are turning to technology for low-cost, accessible investing. But are these platforms enough?
Ms Mwelu, does not place them to be enough. “Digital platforms may be helpful for access and convenience, but they don’t always adapt in real-time to changes in local market. Fund managers’ winning edge is that we offer hands-on experience and the ability to act quickly when the environment shifts like reacting to interest rate movements. But you will notice a trend where fund managers are now employing the use of AI to make those investment decisions.”
Mr Macharia adds that beyond tech efficiency, fund managers bring judgment and foresight. “They are better able to spot value traps, overvalued sectors, or macroeconomic headwinds that require a tactical shift. That’s hard to automate fully.”
For investors with long-term goals, such as saving for retirement or paying for education this foresight is indispensable. Mr Mathu outlines this.
“The fund manager will continuously monitor the markets and rebalance portfolios to manage risk. For example, if rates are rising, they might shift toward shorter-duration instruments to preserve capital,” he says.
Danger of DIY
These professionals operate based on a structured Investment Policy Statement (IPS) that is tailored to different investor profiles. But the real issue comes when individuals, particularly from the growing middle class try to make these financial decisions on their own.
“Investment understanding is not inherent. We are not born with that knowledge, neither is it part of a school curriculum. So most of the time, you find that navigating financial decisions becomes a problem because the whole essence of investment is to get a return and manage risks,” Mr Macharia says.
He cautions that this lack of foundational knowledge often leads to misallocation of assets.
“Some years back, and even now, the narrative around the country is that real estate, especially land, is a good investment and by any means, it is a good investment. But if you're starting life, your needs are around liquidity. You need money. But then buying land cannot achieve that. You’ve locked your investment into something you can’t easily liquidate, so tomorrow if you need to upgrade your education, you cannot sell the land easily. That’s a mismatch. There is nothing wrong with the investment. There is nothing wrong with the objective. It is that there is a mismatch.”
And suitability, Mr Macharia stresses, is everything. “Suitability has to be very contextual to every person. Not all investments are suitable to everyone. If you're choosing an investment that is not suitable to you, it will not achieve what you are trying to achieve not because it’s a bad investment, but because it doesn’t fit your current need.”
Choosing a fund manager
Consequently, when choosing a fund manager, both Ms Mwelu and Mr Mathu agree on the importance of transparency, track record, and alignment with the investor’s goals.
Mercy Mwelu, Head of Business Development at Jubilee Asset Management (JAM).
Photo credit: File | Nation Media Group
“Look at their track record and not just performance,” Ms Mwelu advises. “Consider how they’ve handled tough periods. Are they transparent about their strategy? Are the fees clearly explained? Trust is essential. Do you get your money on time? As for value, if a manager helps you avoid costly mistakes and keeps your money growing, it’s a cost that is worth it.”
But within the industry, not all players are equal. Mr Mathu says that investors should look deeper into a fund manager’s internal culture and structure.
“It’s good to consider a fund manager that has been in operation for at least five years and has a good and reputable performance history, and a fee structure. Different fund managers have different charges for the portfolio administration, so go for the best and most transparent deals. Also go for a fund manager that has a clear investment philosophy that aligns with your money personality, risk appetite, and potential returns. Ownership structure and firm size are important in determining the stability and adaptability of the business.”
Mr Macharia takes it further by pointing out a widespread misconception. “There is a misconception that anyone selling an investment product is an advisor. But a real advisor is not someone selling you a product. It’s someone sitting down with you, analysing your life, evaluating where you are, where you want to be and mapping that journey with you.”
Stability is key
But even then, there’s a catch. Mr Macharia says, “There can be investments that are good with the fund manager, but they are not suitable for you. That word suitability is very key and very personal. Most fund managers are mandated to assess your risk profile. But still, what is proper investment advisory is not so much adopted in this country. Many people are self-advising even those accessing products from fund managers.”
However, Mr Mathu warns that not all fund managers are created equal, and some red flags should not be ignored. “Watch out for unrealistic returns on investment, unregistered operations and delayed payouts, whether interest, coupon, or withdrawals resignations of portfolio managers, delayed market updates and statements, or allegations of misuse or embezzlement of funds.”
“It’s not about being wealthy, it’s about being wise with what you have,” Ms Mwelu says.
