An asset management system can be defined as an infrastructure capital assets management to lower the cost of operating, maintaining, and owning assets at levels of service that are acceptable. This type of management involves assets that encompass buildings and infrastructures, such as waterworks.
Use of Asset Management in Business
Another type of asset management system involves brokerage firms and companies that manage their clients’ monies to get specific financial gain within the guidelines of an organized investment pool. The investment pool might include hedge funds, retirement or pension funds, other institutional funds, and mutual funds which could be invested, depending on the organization of the fund, into fixed-income securities, derivative products such as futures and options, and equities.
The asset management system from Simcorp requires a broad and large infrastructure. Retail brokerage firms have similar infrastructures on a smaller scale. In general, each fund must not only have a fund manager but also the following professionals:
- analysts to do research on fixed-income investments and equities
- soothsayers and economists to predict the direction of the economy and market
- traders to do the orders
- marketers and salespeople to sell the fund to people
- accountants to keep track of assets
- teams of back-office staff and tech specialists
Asset Management by Scale: Medium to Large
Asset management can be divided into two parts: medium sized firms and mammoth companies that manage billions or more. Big brokerage firms will manage anyone’s assets whether you have $5,000 or $5,000,000. They are supposed to find investments that will work for a client but will not be liable for if it doesn’t work out.
The Small(er) World of Fiduciaries
On the other hand, fiduciaries occupy a much smaller domain. They hold to a standard that legally binds them to act in the best interest of the client. Anything that they place in the portfolio of a client will work out best for them. Asset managers in fiduciaries have a standard fee and could not accept commissions. An asset of a client is housed separately from the advisory firm that has limited access to it. The money can only be used for the sole purpose of trading, and access to the client’s money will only be for the client himself.
Series 7 Services
An asset management service that has a Series 7 would mean that they can legally accept commissions. If the firm is selling mutual funds that come under the company’s name, there is a good chance that the firm needs to unload or sell this product.