What is an Independent Asset Manager in 2023?
The wealth and asset management market appears to be thriving despite the economic uncertainty brought on by recent events like COVID-19 and the Russian Ukraine war.
Recent stats show that the global value of assets under management (AUM) reached almost £95 trillion in 2021 – up from £60 trillion in 2016.
The global population of HNWIs (high-net-worth individuals) is expanding rapidly and there is a growing need for financial professionals like independent asset managers.
What is an independent asset manager?
An independent asset manager, also known as an external asset manager, is a senior financial professional or company that provides bespoke asset management services to HNW clients.
As the name suggests, independent asset managers typically operate independently from traditional financial institutions and private banks.
What does an independent asset manager do?
An independent asset manager helps HNW clients increase wealth by acquiring, maintaining, and trading investments with high growth potential.
They should be able to provide clients with personalised advice regarding their investments, assess their risk tolerance levels, and create tailored plans that fit their specific goals and objectives.
Many independent asset managers provide additional services such as:
- Tax consultation
- Cash management
- Inheritance management
- Estate planning trading
- Corporate financing
- Estate planning
- Portfolio management
Some independent asset managers specialise in a particular area such as private equity or stocks, while others offer several services. It is also not uncommon for an independent asset manager to focus on a specific type of client e.g. private clients or startup businesses.
What is the difference between asset management and wealth management?
The main goal of asset management is to invest an individual’s money (or investable assets) to make more money. Whereas, wealth management is a more holstic service and focuses on protecting an individual’s financial health over the long term.
What are the benefits of using an independent asset manager?
Independent asset managers are becoming a popular alternative for independent investment advice and asset management services.
Here are some of the main advantages of using an independent asset manager:
- Personalised experience: Independent asset managers are typically individuals or small companies. This means they offer a more independent and personalised service when compared to commercial banks and other financial institutions.
- Highly customised service: An independent asset manager will build a strong investment portfolio that is tailored to your specific needs and goals.
- Highly trained professionals: Independent asset managers are highly trained professionals with extensive experience in the world of asset management and private banking. They have the skills and knowledge to help you achieve the best results from your investments.
- All assets can be handled: An independent asset manager can handle most types of assets including property, stocks, money, commodities, and other financial products. All of your assets will be kept safe and handled exclusively by your independent asset manager.
How is the digital revolution impacting asset management?
People are becoming more tech-savvy and reliant on technology and apps to make their daily lives easier. HNWI digital expectations are growing rapidly and affluent clients expect financial advisors to leverage innovative digital tools to make wealth management more efficient, convenient, and transparent.
According to Global Custodian: “The asset management industry is one of many industries in the middle of a digital disruption.” The digital revolution cannot be stopped and the asset management sector needs to prepare for digital disruption and adapt quickly.
Finance professionals must embrace technology and optimise outdated processes if they want to survive the digital revolution and remain competitive in the modern era.
Independent asset managers must embrace digital tools
Independent asset managers can leverage digital tools like Topaz to digitize many of their processes and deliver the ultimate HNW client experience.
Topaz provides IAMs with the tools they need to embrace digital transformation and maximise business value.
Suggested reading: The Digital External Asset Manager: What’s next in EAM software?
- The global asset and wealth industry is expanding and there is an increasing need for wealth management professionals like independent asset managers.
- Digital disruptions will revolutionise how wealth management firms operate over the next decade.
- HNWIs now expect independent asset managers to leverage digital tools to make wealth management more efficient and transparent.
- Wealth management firms must embrace digitisation if they want to meet the evolving needs of affluent clients and remain competitive in the digital age.
If you want to find out more about how Topaz can boost client engagement while improving efficiency and compliance, get in touch.