Asset Management Exam 1
Three key asset management sectors by customer type - answer1) Institutional asset
management
2) Retail asset management
3) Wealth management / private client
Institutional asset management is the provision of asset management services to a
variety of institutions, including: - answer Insurance companies
Pension funds
Nonfinancial corporates
Endowments
Government bodies
Charities
Defined benefit / contribution plans
Who represents the dominant segment of the asset management industry. -
answerInstitutional customers, such as insurance companies and pension funds
The three different client mandates that wealth managers serve under include: -
answer1) Discretionary Mandate
2) Non-Discretionary Mandate
3) Execution-Only Mandate
Discretionary Mandate - answerClients who opt for a discretionary mandate delegate
the management of their assets - including investment decisions - to professional wealth
managers who work according to an agreed investment strategy
Non-Discretionary Mandate - answerClients who prefer to be actively involved in the
management of their assets can choose a non-discretionary (or advisory) mandate. The
manager role is limited to analyzing and monitoring portfolios, together with tailoring
proposals to support investment decisions.
Execution-Only Mandate - answerAn execution-only mandate is also possible. Here, the
wealth manager essentially acts as an intermediary in the buying and selling of assets
on the client's behalf. No advice is given, so there is little recourse to the manager if
investments do not perform well.
Retail asset management - answeris aimed at individual or private investors with a
lower net worth. It includes trusts and professionally managed accounts. A client's level
of investable assets (that is, net worth) determines the level of service received, with
managers typically charging a fee based on assets under management (AUM).
Three key asset management sectors by customer type - answer1) Institutional asset
management
2) Retail asset management
3) Wealth management / private client
Institutional asset management is the provision of asset management services to a
variety of institutions, including: - answer Insurance companies
Pension funds
Nonfinancial corporates
Endowments
Government bodies
Charities
Defined benefit / contribution plans
Who represents the dominant segment of the asset management industry. -
answerInstitutional customers, such as insurance companies and pension funds
The three different client mandates that wealth managers serve under include: -
answer1) Discretionary Mandate
2) Non-Discretionary Mandate
3) Execution-Only Mandate
Discretionary Mandate - answerClients who opt for a discretionary mandate delegate
the management of their assets - including investment decisions - to professional wealth
managers who work according to an agreed investment strategy
Non-Discretionary Mandate - answerClients who prefer to be actively involved in the
management of their assets can choose a non-discretionary (or advisory) mandate. The
manager role is limited to analyzing and monitoring portfolios, together with tailoring
proposals to support investment decisions.
Execution-Only Mandate - answerAn execution-only mandate is also possible. Here, the
wealth manager essentially acts as an intermediary in the buying and selling of assets
on the client's behalf. No advice is given, so there is little recourse to the manager if
investments do not perform well.
Retail asset management - answeris aimed at individual or private investors with a
lower net worth. It includes trusts and professionally managed accounts. A client's level
of investable assets (that is, net worth) determines the level of service received, with
managers typically charging a fee based on assets under management (AUM).
