Thursday 19th November 2020
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They are the best money managers
Where are wealthy clients best advised? Competent and trustworthy investment advice is essential, especially in times of crisis. Ntv, together with Focus-Money and the Institute for Asset Build-up, have tested who offers this.
The corona pandemic paralyzed large parts of the global economy in 2020 – and an end to the pandemic is far from in sight. Many investors are therefore very insecure, which poses enormous challenges for asset managers. Because the volatility in the markets is likely to remain high in 2021. In addition, interest rates will remain at a low level and thus limit income from interest investments.
“In order to react to these challenges, asset management companies have to personalize their advice more and tailor it even better to the client’s individual investment portfolio and personal risk tolerance,” explains Dirk Rathjen, director of the Institute for Asset Development (IVA). In addition, the quality of diversification and product selection play an increasingly important role.
High quality advice and risk education are essential
All institutes were included in the comprehensive test which, according to a private banking study by a renowned personnel consultancy, are among the leading companies in the regions of Berlin, Rhineland, Frankfurt, Hamburg, Munich and Stuttgart. In addition, “wildcards” were given to institutes that are of particular interest for professional reasons. These include, for example, larger savings banks and private asset managers.
For the test, the Institute for Asset Development used a total of five test persons who gave very similar information about their financial situation and investment goals. In order to achieve the most authentic appearance possible, the details were adapted to the real life situation of the test subjects.
The following information was identical in all tests: Assets of 580,000 euros after taxes are freely available for investment. The test customers stated that they did not want to take care of the system themselves. Therefore, they are looking for comprehensive and professional asset management. In addition, they would not need the money in the foreseeable future and are therefore prepared to invest a considerable amount in stocks. With such requirements, a high quality of advice and risk education are essential. In addition, the simplest possible cost model with a flat fee was desired.
Equity exposure increased again
When evaluating the test results, it is noticeable that stocks and liquidity are the only two asset classes that are included in all investment proposals. The proportion of equity investments in the model portfolios has even increased slightly compared to the proposals made last year. The equity ratio of the average investment proposal is around 52 percent.
In a historical comparison, the equity component is thus well above the average. “On the one hand the declining importance of alternative investments can play a role here, on the other hand the interest rate level, which has fallen to almost zero,” comments Rathjen on the results. It should be noted in this context that the average liquidity ratio of 12 percent has hardly changed on the other side.
The second most common asset class in the investment proposals are bonds, which are also considered in all investment proposals with one exception. The average weighting in the model portfolios is 28 percent.
The real estate, commodities and derivatives asset classes do not even appear in three quarters of the investment proposals. In the case of precious metals, the picture is divided across all investment proposals. They are used by almost half of the asset managers, but not by the rest.
A detailed examination of the sample portfolios also shows that the individual asset managers react to the current challenges in the financial markets with very different approaches. The different approaches to weighting stocks and bonds are most evident. The most aggressive proposal is almost entirely invested in equities at 99 percent, while the maximum selected bond quota for a much more conservative investment proposal is 49 percent.
Comparing pays off
In addition to the quality of the investment proposals, costs naturally also play an important role when choosing the best asset manager. The test reveals clear differences between the providers when it comes to the level of fees. On average, investors this year with an investment amount of this magnitude and the desired equity quota will have to reckon with slightly increased annual total costs of around 1.8 percent compared to the previous year.
A total of 18 banks and asset management companies showed outstanding performance in this year’s test. These are the in alphabetical order Bethmann Bank, the BW Bank, the Commerzbank and the German pharmacist and doctor bank, the Deutsche Bank, the Frankfurter Sparkasse, the Frankfurter Volksbank, Fürst Fugger private bank, Grüner Fisher Investments, the HypoVereinsbank, the Kreissparkasse Cologne, the Oberbank, the Quirin Privatbank, die Sparkasse Düren, the Sparkasse KölnBonn the Sutor Bank, the VMZ asset management and the Weberbank.