Why choose asset management?
If you would like to start investing in the future, but have little knowledge about it, it may be a wise choice to hire an asset manager . The advantages and disadvantages of an asset manager are discussed below, and this form of investing is critically compared to starting to invest yourself. This will help you answer the question: Why asset management?
What exactly does asset management entail?
An asset manager will manage your assets and make investments on your behalf. The manager has a lot of knowledge and experience and can therefore make well-considered choices. This way, there is a greater chance that your assets will grow, which is of course desirable. The asset manager can invest in shares, bonds or other investment products. A specific permit from the AFM is required for this.
What are the duties of an asset manager?
The main objective of an asset manager is to protect your assets or usually even to grow them. The way in which the manager tackles this depends on your risk profile , wishes and your financial space. The manager will take this into account when composing the investment portfolio and determining a strategy that gives the assets the best chance of growth.
Types of asset management
There are various types of asset management. You can go into business with parties that are mainly specialized in individual and personal contact, where your personal financial situation is central. The assets often have to be higher with these types of managers, because of the personal approach.
Another option is an asset manager who mainly helps groups of clients. With these managers, the assets are invested together with those of other individuals in a joint portfolio. In that case, not only your personal situation is taken into account. Your assets do not have to be as high for this and you also pay a lower rate for the help. This is also called collective investing .
Active vs passive surveillance
There is another distinction to be made in asset management: active and passive supervision. Active supervision means that attention is mainly paid to personal investments and relatively more actions are taken. With passive supervision, not so much action is taken with the aim of shadowing a specific benchmark. According to proponents of this form of investment, this form of investment yields the highest return at the end.
Advantages and disadvantages of asset management
If you have hired an asset manager, this can be beneficial, but in some cases it can also be disadvantageous. It is important that you know what the pros and cons are before you make a decision. The biggest advantage and the most important disadvantage are listed below.
If you are unsure whether to start investing yourself or hire an asset manager, we recommend that you read the following article: ” Investing yourself or having someone else invest ?”
Benefits of investing through an asset manager
An advantage of choosing asset management is that you hand over the reins to an expert with knowledge of investing. So you don’t have to worry about how you want to invest your money and what the best strategy is for this. This can provide peace of mind (especially if you have little to no experience). A manager has sufficient knowledge and understanding of the matter and knows how he/she can make the assets grow in the best way. In addition, the manager will try to limit the risks as much as possible.
Disadvantages of having your investments managed by an asset manager
A disadvantage of asset management is that it involves additional costs. These costs differ per manager, one party can charge higher rates than the other party.
In addition, some administrators expect a specific amount of assets. In exceptional cases, you may need to have up to 1 million euros at your disposal. Of course, this is not feasible for everyone. There are also administrators who expect less money from you and use a lower deposit amount. For example, with some administrators you can get started with 100 euros per month.
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