Asset Management Solutions
Carrying out proper research and due diligence prior to making any investment decision is an important and prudent step. An assessment of the durability and reliability of a specific asset management scheme should be a critical part of such a process. After all, any improper or deficient management structure could result in a loss of wealth or missing out on potential financial gains.
Any asset ownership that utilises an asset manager involves specific risks related to the custody and management of those assets. Many traditional asset management schemes nowadays are heavily reliant on confidence and trust both in the asset manager and the framework which governs those arrangements. Without such entrustment, many of these schemes would not exist. Unfortunately, many of these traditional schemes have significant inherent weaknesses due to the level of complexity and lack of transparency that has developed over the years. A lack of clear and direct ownership in many of these schemes make the assets held in these structures more exposed to what is commonly referred to as custodial risk or custody risk. This is the risk associated with a custodian becoming insolvent and a risk of loss through custodian error or bad performance. The frameworks which are in place to manage such risks work well when dealing with custodial issues on a limited scale. Any unfolding of such risks in a single entity or within a limited and confined sector are therefore usually managed without major inconvenience to the asset owners. Unfortunately, when it comes to systemic risks involving wide-spread financial disruption, the integrity of the framework could be severely compromised resulting in a major or total loss of the assets for many owners.
Alternative Asset Management Solutions
At Endurant Wealth we identify specific asset management solutions which are aimed at reducing such risks as there is strong evidence indicating that there is an increasing likelihood of systemic events occurring as well as an increase in their potential magnitude. We identify asset management solutions that minimise the reliance on trust between the asset owner and the asset manager. It is also becoming increasingly important to have more personal control over one’s assets as this can reduce some of the exposure to systemic risk.
Specifically, the asset management solutions that we identify include products and services such as storage solutions for physical assets and new alternative electronic savings platforms.