Essential Guide To: Choosing An Independent Asset Manager

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Independent Asset Managers (IAMs) offer wealth management services that are independent of a private bank. Most independent asset managers started their careers as private bankers. 

As a client of an IAM, you will get the advantage of their experience and a network of contacts that they have previously established in the financial services industry. 

Why Choose An Independent Asset Manager?

While experience and network are great advantages of engaging an IAM, the primary benefit that clients get from dealing with an independent asset manager (IAM) is that you have direct access to the individuals who own and operate the firm, as well as close contact with the portfolio managers. 

This is a more personalised experience compared to dealing with a large private bank, where private bankers typically oversee a much larger number of clients.

If you retain the services of an independent asset manager, you can expect to receive the following services and benefits:

  • Independent investment advice that is in sync with your risk profile and your expected rate of return.
  • A transparent fee structure.
  • Access to institutional-class investments. While the product may not differ to those offered at retail level, the upfront sales charge and ongoing management fees charged to the investor will differ significantly.
  • Highly personalised service and impartial advice on investment options.
  • Consolidated reporting. The convenience of dealing with your independent asset manager for your entire asset portfolio, which is especially useful if you have investments spread across several private banks and institutions.

Many independent asset managers provide additional services as well that include trust planning, direct investment opportunities, and multi-family office services.

How is this different from what a private bank does? 

It’s important to remember that the responsibility of an individual who works for a private bank is to the organisation. There are revenue targets to be met and the salespeople in a private bank are constantly under pressure to increase business volumes. 

However, an IAM is responsible to the client as fees are usually charged on a flat fee basis, usually a percentage of the Assets under Management (AuM). This model is attractive as it ensures there is no conflict of interest. 

A more personalised experience compared to dealing with a large private bank, as private bankers typically oversee a much larger number of clients.

How to Choose the Right Independent Asset Manager for You

Step 1: Define Financial Goals + The Amount to Invest 

Draw up a list of your financial goals and estimate the amount that you plan to invest. Some questions to ask:
What is the sum that you will allocate immediately?

  • How much will you add over the next one year?
  • How much risk are you willing to take?

Step 2: Gain Clarity of The Services YOu Need

Before contacting an IAM, you need to fully understand the scope, objective, services and role of your IAM. This keeps your goals on track and frames the meeting you will be having with them.

Step 3: Search for an IAM

One quick way to search for an IAM would be with our SmartSearch tool, which will connect you to the right advisor for your goals.

Alternatively, visit the websites of the firms you’ve shortlisted. Pay special attention to the minimum investment amount that is stipulated. It’s also important to ascertain the length of time that the firm has been in existence.

Step 4: Selection Process

Set up meetings your top 2-3 candidates and schedule a one-on-one interaction with the representative of the firm. 

Remember that it is important to develop a sense of trust with the firm that you engage. You need to be comfortable with the person that you are speaking to, and should proceed to the next stage only if this condition is satisfied.

Written by

Cheryl Toh

Last updated on

October 11th 2019, 10:33 am

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