Develop and improve products. List of Partners vendors. Asset management is the practice of increasing total wealth over time by acquiring, maintaining, and trading investments that have the potential to grow in value. Asset management professionals perform this service for others. They may also be called portfolio managers or financial advisors. Many work independently while others work for an investment bank or other financial institution.
Asset management has a double-barreled goal: increasing value while mitigating risk. That is, the client's tolerance for risk is the first question to be posed. A retiree living on the income from a portfolio, or a pension fund administrator overseeing retirement funds, is or should be risk-averse. A young person, or any adventurous person, might want to dabble in high-risk investments. Most of us are somewhere in the middle, and asset managers try to identify just where that is for a client.
The asset manager's role is to determine what investments to make, or avoid, to realize the client's financial goals within the limits of the client's risk tolerance. The investments may include stocks, bonds, real estate, commodities, alternative investments, and mutual funds, among the better-known choices. The asset manager is expected to conduct rigorous research using both macro and microanalytical tools.
This includes statistical analysis of prevailing market trends, reviews of corporate financial documents, and anything else that would aid in achieving the stated goal of client asset appreciation. Asset management companies compete to serve the investment needs of high-net-worth individuals and institutions.
Accounts held by financial institutions often include check-writing privileges, credit cards, debit cards, margin loans , and brokerage services. When individuals deposit money into their accounts, it is typically placed into a money market fund that offers a greater return than a regular savings account. The added benefit to account holders is all of their banking and investing needs can be met by the same institution.
These types of accounts have only been possible since the passage of the Gramm-Leach-Bliley Act in , which replaced the Glass-Steagall Act.
The Glass-Steagall Act of , passed during the Great Depression, had forced a separation between banking and investing services.
Now, they have only to maintain a " Chinese wall " between divisions. Merrill Lynch offers a Cash Management Account CMA to fulfill the needs of clients who wish to pursue banking and investment options with one vehicle, under one roof. The account gives investors access to a personal financial advisor. This advisor offers advice and a range of investment options that include initial public offerings IPO in which Merrill Lynch may participate, as well as foreign currency transactions.
Interest rates for cash deposits are tiered. Deposit accounts can be linked together so that all eligible funds aggregate to receive the appropriate rate. SIPC does not shield investor assets from inherent risk but rather protects those assets from the financial failure of the brokerage firm itself.
Along with typical check writing services, the account offers worldwide access to Bank of America automated teller machines ATM without transaction fees. Bill payment services, fund transfers, and wire transfers are available. The MyMerrill app allows users to access the account and perform a number of basic functions via a mobile device.
An asset manager will work closely with you to understand your financial goals. This could be preparing for retirement through long-term investments or growing your assets through a diverse portfolio.
Your asset manager will then create a strategy based on your personal preferences, comfortable risk level and unique circumstances. Using this plan, they can start making investments or using financial products on your behalf. Once you have a portfolio of investments, your asset manager will maintain your investments or manage any financial products which are part of your plan.
This includes selling funds when the timing is right and purchasing more assets based on market research. Asset management firms manage funds for individuals and companies.
They make well-timed investment decisions on behalf of their clients to grow their finances and portfolio. Working with a group of several investors, asset management firms are able to diversify their clients' portfolios. To maximise your potential returns, they monitor and assess the market to look for threats and opportunities and adjust your portfolio accordingly.
Tracking software can also be used as a central database of your existing assets. Asset management tools also include registered investment advisors, who outsource the management to a third party but can provide bespoke advice.
Before you can invest more wisely or input your assets into a digital management system, you need to perform a stock take. This is particularly important for computers or other electronics, which depreciate significantly over time. Understanding life-cycle costs helps your business plan for maintenance and disposal. You should also think about service costs for each asset, to keep them in top shape.
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