My finances, my projects, my life
October 2, 2022

Asset management: clear goals, expert guidance

  Compiled by myLIFE team myINVEST August 20, 2021 11

Discretionary mandates: the foundation for long-standing partnerships

Markets can change in a flash. This high volatility means it’s becoming more and more difficult to choose the right investments. How can you make a well-informed decision when there are countless trends, risks and information sources to consider? What you need is guidance from professionals. Depending on your investor profile, there are two options available: investment advice and discretionary management. In other words, you can either just ask an expert for their advice or have them manage on your behalf some or all of the financial assets you want to invest.

Financial asset management is about generating financial security. Asset management mandates (discretionary management) involve a client asking a bank to manage their assets on their behalf and for their benefit, while sticking to the agreed investment strategy. The assets need to be structured flexibly, soundly and sensibly enough to minimise the impact of turbulence and help clients reach their long-term goals. The actual architects of the financial assets are the portfolio managers.

Portfolio managers, the caretakers of your assets

Portfolio managers are responsible for leveraging the various bank departments to help clients generate long-term wealth and give them regular reports. Their ultimate goal is to achieve better long-term performance than the overall stock market cycle. Constantly on the lookout for opportunities to boost performance, they must, however, always keep an eye on risk. By continually analysing the market, they’re able to find the perfect balance between risk and return.

Portfolio managers must fulfil all their due diligence and quality obligations while forging and maintaining long-lasting relationships with their clients.

Portfolio managers must fulfil all their due diligence and quality obligations while forging and maintaining long-lasting relationships with their clients. While they are of course always thinking about success, they must never lose sight of their clients’ profile and goals.

Why you should use a professional – three key benefits

People who invest their assets are looking to increase their capital more quickly than they could with savings, or to consolidate it through diversification. Here are the three biggest benefits of working with a professional:

    • Expertise: In what is a very complex area, you need clarity. Engaging an asset manager means investment decisions are made by professional, experienced portfolio managers. A seasoned team of experts and financial professionals crafts the portfolio and manages the assets, both globally and in a diversified manner.
    • Time: The constant changes on markets bring risks and necessitate quick, informed decisions. These require time – time that you might not have but your portfolio manager will.
    • Separation: Investors need to keep a cool head and be objective. Experts are trained to see things from a realistic, rational perspective to allow them to make the best decisions.

It’s important to remember that investment advisers have a performance obligation but not one to achieve returns, so a management mandate does not protect you from market risks or guarantee a profit. Make sure you know exactly what to expect when you speak to your financial adviser. What’s more, advice is not free. That means that in tough times, when returns are limited, any profit may be reduced by the related costs. That’s why investors are often advised to invest over the long term.

Finding the value of your assets

To define your investor profile, it’s essential first to know the actual value of your assets, which is the sum of all your assets less any liabilities. The biggest components of your assets will be:

  • Your homes and any plots of land
  • Agricultural land
  • Liquid assets (bank accounts, savings, cash, etc.) and investments
  • Life insurance plans, pension plans, receivables
  • Securities
  • Usufruct properties
  • Professional assets (companies, law firms, offices, etc.)
  • Any other tangible property or items of value (vehicles, jewellery, art, furniture, etc.)