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Asset Management

Asset Management

31.03.2021

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Asset management (investment management, fiduciary services, trust management) is the professional management of various types of securities (stocks, bonds, etc.) and other assets (for example, real estate), the purpose of which is to generate profit for investors. Investors in this case can be both companies (insurance companies, pension funds, corporations, etc.) and private investors (directly or through collective investment).

The transfer of assets for management is carried out on the basis of a property trust agreement.

Trust asset management: the essence of the concept

In the modern world, the lack of time is solved by looking for helpers who do some work for us. For example, if you do not have time to pick up your child from school, you ask a relative to do so.

And there are tasks that you cannot solve due to a lack of skills. Want to build a house, but don’t know how to do it. Professional specialists come to the rescue, who will approach the issue responsibly and competently.

In the examples listed, you entrust your responsibilities to others. This is the essence of trust management. You delegate some business to market professionals who have experience and knowledge. In return, they receive income from you.

Trust asset management is a set of tasks that a manager sets for himself in order to achieve your goals.

Your company can act as an asset, which you cannot do because of a long stay. Or perhaps you will have to leave your apartment for the duration of the vacation, which is rented for a day. An experienced broker will solve your problems and handle the responsibilities.

In order for a third party to start managing your assets, you must conclude a special contract. It prescribes the rights and obligations of the parties, the object of the transaction, and its validity period. If for some reason the work of an intermediary does not suit you, you are free to find another by breaking the contract with the current one.

A whole management company with a staff of specialists most often acts as such an intermediary. You can choose any employee you like based on recommendations, his experience, or the profitability of his transactions.

Trust management is a new level of solving your problems. The main thing in this business is to find a professional manager who will definitely cope with the new responsibilities.

It is important to understand that intermediaries rarely guarantee the outcome of a transaction. This is due to the legal framework that does not allow the client to provide specific numbers. Such a nuance is necessarily prescribed in the agreement, and it is worth paying special attention to it.

The assets of the enterprise, which are on its balance sheet, are most often understood as assets. These include current and non-current assets.

Benefits of trust management

Transfer of own assets under the control of intermediaries is popular and gaining momentum. More and more people want to receive high incomes, but at the same time not spend their personal time on them.

It is worth noting that trust management has a lot of advantages, which attracts new adherents.

The main advantages of this process are:

  • High profits. Most often, it is higher than what you would get with self-management. It depends on the professionalism of the intermediary and the term for which he was delegated authority. True, you will have to pay for the opportunity to receive increased income. But the total amount that you will get will be rather big. We have already said that management companies will not tell you how much income you can get, but pay attention to the previous experience of the intermediary. On its basis, one can draw a conclusion about the effectiveness of his work;
  • Debugged control system. The specialist knows how the market behaves and can adjust to the current state. He will sell assets on time or buy new ones, depending on the terms of the contract. Each manager has his own tactics and management methods, but different strategies can be applied. The owner of the capital does not have deep knowledge, and therefore there is a risk of conducting an unfavorable transaction, which may result in the loss of part of the funds;
  • Earning income is fast. If you suddenly need the entire amount invested, you can return it. However, it is not recommended to do this, as you will definitely not get a profit. In addition, this will ruin the relationship with the management company, which next time may not meet you halfway in some issues. You can also withdraw part of the capital from circulation. The withdrawal is carried out in a matter of days, which will allow you to quickly resolve possible difficulties;
  • Individual attitude towards the owner of capital. If you transfer a large amount of capital to management or, for example, your business, you will be dealing with a personal manager. He will personally deal with your project, you can always contact him and ask any question. With the help of an individual consultant, it is possible to adjust the terms of the transaction, change the number of assets, or terminate the contract early.

You transfer your assets to a competent specialist who will carry out all operations for you in accordance with the terms of the contract. His services are paid according to the results of the transaction and make up a few percent of the income received.

In rare cases, the intermediary takes a fixed amount, which is prescribed in the agreement. Asset manager aims for maximum results: the more profit, the more his income. Accordingly, a fixed rate does not in any way motivate a specialist to obtain high results.

Trust management tasks

When you enter into an agreement with a management company, you need to negotiate a list of goals that you want to achieve through the transfer of assets.

It may not always be getting the highest income. You may be leaving your property to look after and pay utility bills during your extended vacation.

The agreement sets out the tasks of the intermediary, which are based on your requirements. Often their list for different assets has a common basis.

Let’s list the most popular among them:

  • Earning income. The manager tries to earn the highest possible profit in the current market conditions. This is ensured by the mobile change of management and trading techniques. As we have already said, the intermediary does not guarantee any profit at all, since market jumps can not always be predicted. However, his earnings figures for previous clients may significantly lag behind those he would receive from managing your assets in good luck;
  • Preservation of assets. The manager does everything so that your property does not disappear so that it is not stolen and spoiled. This clause is spelled out in the contract and may contain some reservations. For example, an intermediary company is not responsible for the integrity of your assets in the event of natural disasters, hostilities, or radiation exposure. In addition, you must take care of the protection of the property yourself. For example, take out an insurance policy, install surveillance cameras or provide a fire hazardous system;
  • Compliance with customer requirements. If you have set a goal to make money in the foreign exchange market, then the intermediary has no right to arbitrarily dispose of your money in another direction. For example, he is not entitled to purchase real estate with your funds instead of currency. Otherwise, he will have to answer in court to the fullest extent of the law. If you have indicated the payment of all utility bills, receipts for which will be in the mailbox, then the manager is obliged to pay all, without exception. Otherwise, he will violate the terms of the contract, as a result of which you can demand compensation;
  • Competent management of financial assets, depending on the current market situation. The intermediary must know not only the basics of the sphere in which your assets are circulating but also deep knowledge that will help him to achieve maximum success. Experience is an important factor on the basis of which you need to look for a professional manager. Knowledge of theory cannot be compared with practice, and therefore you should not trust property to persons without practical experience. Otherwise, you risk running out of money.

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