Introduction

In today’s complex and ever-changing financial landscape, individuals and businesses are faced with the challenge of effectively managing their assets. This is where the role of an external asset manager becomes crucial. In this article, we will explore the definition of an external asset manager and discuss the importance of their services for individuals and businesses.

An external asset manager, also known as an investment advisor or wealth manager, is a professional who provides personalized investment advice and portfolio management services to clients. They work independently or as part of a financial institution, helping clients make informed decisions about their investments and achieve their financial goals.

The importance of external asset management cannot be overstated. Whether you are an individual looking to grow your wealth or a business aiming to optimize your investment strategies, an external asset manager can provide invaluable expertise and guidance. They play a vital role in managing investment portfolios and providing financial advice tailored to your specific needs and risk tolerance.

One of the key responsibilities of an external asset manager is managing investment portfolios. This involves identifying investment opportunities, conducting research and analysis, and making informed investment decisions. They take into account various factors such as market trends, risk appetite, and financial goals to create investment strategies that align with the client’s objectives.

Furthermore, external asset managers provide financial advice and guidance. They assess the client’s financial goals and risk tolerance, develop investment strategies, and continuously monitor and adjust portfolios to ensure optimal performance. This personalized approach helps clients navigate the complexities of the financial markets and make well-informed decisions.

Hiring an external asset manager offers several benefits. Firstly, their expertise and experience provide access to specialized knowledge and skills. They stay updated with market trends and changes, allowing them to make informed investment decisions on behalf of their clients. Secondly, hiring an external asset manager saves time and provides convenience. By delegating investment management tasks, individuals and businesses can focus on other priorities while their assets are professionally managed.

Diversification and risk management are also key benefits of hiring an external asset manager. They spread investments across different asset classes, reducing the risk of significant losses. Through strategic allocation, they mitigate risk and maximize returns, ensuring a well-diversified portfolio.

When choosing an external asset manager, there are several considerations to keep in mind. Reputation and track record are important factors to evaluate. Researching the manager’s background and credentials, as well as assessing past performance and client satisfaction, can provide insights into their capabilities.

Transparency and communication are also crucial. Understanding the manager’s reporting and communication

Introduction

External asset management is a crucial aspect of financial planning for both individuals and businesses. It involves entrusting the management of investment portfolios and financial assets to professional asset managers who have the expertise and experience to make informed decisions and achieve desired financial goals. In this article, we will explore the role of an external asset manager, the benefits of hiring one, and considerations to keep in mind when choosing the right manager for your needs.

Role of an External Asset Manager

One of the primary responsibilities of an external asset manager is to manage investment portfolios on behalf of their clients. This includes identifying investment opportunities, conducting thorough research and analysis, and making informed investment decisions. By staying up-to-date with market trends and changes, asset managers are able to maximize returns and minimize risks for their clients.

In addition to managing portfolios, external asset managers also provide valuable financial advice and guidance. They assess their clients’ financial goals and risk tolerance, and develop investment strategies that align with these objectives. Furthermore, they continuously monitor and adjust portfolios to ensure they remain in line with clients’ changing circumstances and market conditions.

Benefits of Hiring an External Asset Manager

One of the key benefits of hiring an external asset manager is their expertise and experience. These professionals have access to specialized knowledge and skills that can greatly enhance investment outcomes. By keeping up with market trends and changes, they are able to identify opportunities that may not be apparent to individual investors. Their experience in managing diverse portfolios also enables them to mitigate risks and achieve optimal diversification.

Another advantage of hiring an external asset manager is the time-saving and convenience it offers. By delegating investment management tasks to professionals, individuals and businesses can focus on other priorities without compromising their financial goals. This allows them to save time and energy, while still benefiting from expert financial guidance.

Diversification and risk management are also significant benefits of hiring an external asset manager. These professionals have the knowledge and resources to spread investments across different asset classes, such as stocks, bonds, and real estate. This diversification helps to mitigate risk and protect portfolios from market volatility. Asset managers strategically allocate investments based on clients’ risk tolerance and financial goals, ensuring a balanced and well-managed portfolio.

Considerations when Choosing an External Asset Manager

When selecting an external asset manager, there are several considerations to keep in mind. Firstly, it is important to research the manager’s reputation and track record. This includes evaluating their background, credentials, and past performance. Client satisfaction and testimonials can also provide valuable insights into the manager’s abilities and effectiveness.

Another consideration is the manager’s investment philosophy and approach. It is important to understand their strategy and determine if it aligns with your own financial goals and risk tolerance. Additionally, consider the manager’s communication style and frequency. Regular updates and open communication are crucial for a successful working relationship.

Fees and charges are also an important factor to consider. Different asset managers may have varying fee structures, and it is important to understand what services are included and if there are any additional costs. It is recommended to compare fees and services across different managers to ensure you are getting the best value for your investment. It is considerably known that EAMs will have institutional pricing and can be a fruitful and inexpensive move in working with an EAM. At Virobel, we have institutional pricing making it much much lower than going directly to a Private Bank. Ask and we’ll show what rates we mean!

Lastly, consider the size and resources of the asset management firm. Larger firms may have more resources and expertise, but smaller firms may offer more personalized service. It is important to find a balance that suits your needs and preferences.

In conclusion, external asset management plays a vital role in financial planning for individuals and businesses. By entrusting the management of investment portfolios to professional asset managers, clients can benefit from their expertise, experience, and guidance. When choosing an external asset manager, it is important to consider factors such as reputation, investment philosophy, communication, fees, and firm size. By carefully considering these factors, individuals and businesses can make informed decisions and find the right manager to help them achieve their financial goals.

Benefits of Hiring an External Asset Manager

Benefits of Hiring an External Asset Manager

Managing your assets can be a complex and time-consuming task. From investment decisions to risk management, it requires expertise and constant monitoring. This is why many individuals and businesses choose to hire external asset managers to handle their financial affairs. An external asset manager is a professional who specializes in managing assets for clients, providing a range of services tailored to their specific needs. Here are some of the benefits of hiring an external asset manager:

Expertise and Experience: External asset managers are highly skilled professionals with years of experience in the financial industry. They possess in-depth knowledge of various investment strategies, financial markets, and risk management techniques. By hiring an external asset manager, you gain access to their expertise and experience, which can help you make informed investment decisions and maximize your returns.

Objective and Unbiased Advice: One of the key advantages of working with an external asset manager is their ability to provide objective and unbiased advice. Unlike in-house managers who may have conflicts of interest or be influenced by internal politics, external asset managers have no personal stake in your investments. They are solely focused on helping you achieve your financial goals and will provide advice that is in your best interest.

Customized Investment Strategies: Each client has unique financial goals, risk tolerance, and investment preferences. External asset managers understand this and develop customized investment strategies tailored to your specific needs. They take into account factors such as your age, financial situation, and long-term objectives to create a portfolio that aligns with your goals. This personalized approach ensures that your investments are managed in a way that suits your individual circumstances.

Diversification and Risk Management: External asset managers place a strong emphasis on diversification and risk management. They understand the importance of spreading investments across different asset classes and geographical regions to minimize risk. By diversifying your portfolio, they reduce the impact of any single investment on your overall wealth. Additionally, external asset managers constantly monitor the market and adjust your investments to mitigate potential risks and take advantage of emerging opportunities.

Time-Saving: Managing your assets can be a time-consuming task, especially if you have a complex portfolio or limited knowledge of the financial markets. By outsourcing this responsibility to an external asset manager, you free up your time to focus on other important aspects of your life or business. They handle all the administrative tasks, research, and decision-making, allowing you to enjoy the benefits of a well-managed portfolio without the stress and time commitment.

Cost-Effective: Hiring an external asset manager comes with many many cost benefits, one that consists of significantly lower minimums and costs to end clients vs going directly to a Private Bank. At Virobel, we benefit from those institutional and other negotiated fees waived for the benefit of our clients.

FAQ

1. What is an external asset manager?
An external asset manager (EAM) is a professional or a firm that provides investment management services to individuals or institutions. Unlike in-house asset managers, EAMs are independent entities that are hired by clients to manage their investment portfolios. They offer personalized investment strategies, advice, and execution, tailored to the specific needs and goals of their clients.

2. How does an external asset manager differ from a traditional wealth manager?
While both external asset managers and traditional wealth managers offer investment management services, there are some key differences. External asset managers are typically independent entities that are not affiliated with any specific financial institution. They often provide a more personalized and flexible approach to investment management, as they are not limited to a particular set of investment products or services. Traditional wealth managers, on the other hand, are usually associated with banks or financial institutions and may have more rigid investment strategies and product offerings.

3. What are the benefits of hiring an external asset manager?
Hiring an external asset manager can provide several benefits. Firstly, EAMs offer specialized expertise and experience in managing investment portfolios across various asset classes. They can provide a more holistic view of the market and offer tailored investment strategies to meet specific goals. Secondly, EAMs often have access to a wider range of investment opportunities, including alternative investments and niche markets, which may not be readily available through traditional wealth managers. Lastly, EAMs offer a high level of customization and personalized service, allowing clients to have more control over their investment decisions and preferences.