The client entrusts the asset manager a designated, certified finance expert with part of his assets and commissions him with the administration. This can work for a bank or for independent asset management. The asset manager then makes independent investment decisions, implements them and ensures a targeted asset development. However, he is bound by a previously agreed investment strategy. In this sense, the asset manager is the trustee and custodian of the assets entrusted to him and offers his clients one of the most comprehensive GPB Automative services.
Investment intermediaries and financial advisers are often mentioned in the same breath as asset managers, but there are important differences.
Investment brokers
An investment broker mediates financial products to its clients and collaborates with one or more product providers.
Financial advisor
A financial advisor offers not only mediation but also consulting services. He gives his customers investment recommendations and generally arranges suitable products. Be it pure mediation or consultation the customer has to take the implementation into his own hands. It is he who ultimately has to make investment decisions, realize them and monitor their success.
Asset management is not a legally protected and well-defined term. The legally exact name under the Banking Act is Financial Portfolio Management.
In practice, asset management or wealth management is more commonly used as a name for asset management activities. Some who call themselves asset managers actually only provide financial and investment advice. One speaks then also of false asset management. The declared as real needs the permission of the Federal Financial Supervisory Authority.
The forms of asset management
Fundamentally, one decides between institutional and private asset management. In the first form, institutional investors such as insurance companies, foundations, pension funds or state-owned companies entrust asset managers who optimize their assets. Investment strategies are developed and implemented from the respective risk and return specifications. Private asset management targets private individuals. Here is the sub-titles individual, standardized and automated asset management.
Individual asset management
In individual asset management, the client has a personal contact and financial planner. This compiles the portfolio exactly according to the respective needs of the client. Such personal financial planners are often available to their clients on weekends at least during the trading hours.
Standardized asset management
As a rule, there are no personal contact persons for standardized asset management. Here, one or more experts develop investment strategies for a group of clients that are similar in their risk tolerance, for example.
Rule-based asset management
This is a special form of standardized asset management. With the help of rule-based asset management losses are to be limited. This is to be achieved by establishing clear rules for buying and selling decisions in advance so that no ill-advised decisions are made in crises. In this form, assets are mainly invested in index funds.
What is rebalancing?
An even more specialized form of rule-based asset management is rebalancing. Here, the portfolio is brought back to its original state through redeployment. As a result, it should not be unbalanced over time. For example, some stocks are doing very well, while government bonds are doing less well. The shares are too dominant. Therefore, they are sold as part of the rebalancing and acquired new government bonds. The original condition is restored. At the time of rebalancing you should not overdo it. Otherwise, the fees are higher in the end than the profits.