What does asset management mean?
Asset management is an arrangement whereby a client hires an asset manager to look after their assets in accordance with the agreed investment strategy. The asset manager monitors and assesses the portfolio and the individual securities on a regular basis. The client doesn’t need to worry about anything and receives regular information about the performance of the account. The basis for the collaboration is an asset management contract concluded between the asset manager and the client. As part of this contract, the client grants the asset manager limited power of attorney.
Advantage of an asset manager vs. a bank advisor
What are the advantages of an asset manager over a bank?
As an independent asset manager, we are not subject to overriding corporate restraints. This means we are independent when it comes to selecting investment products, and free to devise the best, most cost-efficient way of fulfilling the client’s individual requirements.
Furthermore, the asset manager’s business success derives directly from the client’s success. This provides substantial motivation to develop and maintain a long-term and successful client relationship. The objectives of the asset manager and the objectives of the client are the same.
Where are client accounts maintained?
Clients can choose from several reputable custodian banks in various jurisdictions, such as Switzerland, Germany and Liechtenstein. The custodian banks are linked into the deposit protection funds in their respective jurisdictions. A custody and a clearing account are opened in the name of the client at the custodian bank. MBCM is only granted limited power of attorney that allows it to conduct transactions to carry out the client’s investment decisions in their custody account. MBCM is not able to access or accept the client’s assets.
Security of assets (insolvency protection)
What happens if the bank maintaining the custody account, or MBCM, becomes insolvent? Are client assets safe?
MBCM only works with reputable custodian banks that are linked into deposit protection funds. In the event of the insolvency of a custodian bank the client’s assets remain the property of the client and are protected as legally separate assets. This means that the client’s assets can be transferred to a custody account at another bank. If the asset manager is insolvent they no longer have limited power of attorney over the client’s custody account. This has no impact on the client’s assets.
Is there a minimum investment for asset management?
We chose not to set a minimum investment because we feel that each client relationship is individual and unique. We also understand that you need to build trust over time, through a sound partnership. Our modular investment strategy ensures professional asset management, irrespective of a particular client’s investment volume.
Transparency and reporting
What information is made available to clients?
We believe in complete transparency, so our clients have access to all their information. For example, clients can view their portfolio at the bank maintaining their custody account online at any time. And depending on their investment strategy and wishes, our clients also receive regular custody account reports. Clients can, of course, also request the daily custody account balance from their advisor at any time.
Flexibility and availability of assets
Do clients have the option of making deposits or withdrawals from the custody account?
Yes, you can make deposits or withdrawals at any time, on a regular or sporadic basis, as most of the portfolio is invested in daily liquid securities. One popular option is to have the coupon on a bond portfolio paid out monthly to the client’s account to supplement their retirement pension. Or monthly deposits can be made to equity funds for capital formation.
What costs do clients incur in connection with the asset management?
The client is subject to custody account fees and transaction costs imposed by the partner bank maintaining the custody account. Here MBCM has negotiated special terms and conditions with the partner bank that we then pass on to our clients.
There is also an asset management fee for consultancy and the continuous management of the assets, which is charged quarterly. This fee is based on the volume of the assets and the client’s risk structure.
How long are clients bound by the asset management contract?
Clients can dispose of their assets at any time. Additional payments and redemptions may be made at any time, taking account of the capital market environment. The asset management contract with MBCM can be terminated at any time to the end of the respective quarter.
Does MBCM offer any other services in addition to asset management?
Our main activity and core competency is the management of assets and investment advice. However, our focus on our clients extends beyond asset management, which is why we maintain an international network of trustees, tax advisors, attorneys, real estate brokers and other specialists. We call on them to provide advice if our clients have any requests or queries beyond the scope of asset management. In addition, we can provide consolidated reports and facilitate financing upon request.