18May2024
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Banks vs. Multi-Manager Expertise πŸ’ΌπŸ“ˆ

Disclaimer: The views and opinions expressed in the vapa Swiss independent wealth management blog posts featured on this page are solely my own and do not necessarily represent the views of any institutions or organisations I may be associated with. These posts are intended to share personal insights and perspectives and should not be interpreted as official statements or positions of any affiliated entities.

Do banks or wealth managers address the wide range of investment possibilities with extensive deep granularity? Or is it better to entrust your wealth to a dedicated professional multi-manager investment expert and invest like long-term institutional investors sticking to an overall asset allocation strategy following sub-strategies within a pooled investment?

Professional multi-manager experts have deep asset allocation knowledge and thoroughly analyse specialized investment managers. Such a selection process often eliminates the majority of online platform funds ostensibly launched for the retail investor.

Of course, there are also disadvantages, like the often raised skyrocketing fees, which were undoubtedly the order of the day in the past with the fund-of-hedge funds 2/20. But today, by pooling assets, lower costs can be achieved, and within the mutual fund, transactions occur at institutional prices.

If I buy a U.S. value fund today and the market now favours U.S. growth funds, then there are typical retail transaction costs besides jumping in between retail class units. With the multi manager approach, such a shift is triggered by asset allocation experts, who place much more emphasis on performance-reducing fees. The transaction is executed at a cheap institutional ticket fee rate shared among all unit holders.

As part of the financial industry, I have doubts, but I have followed the multi-manager approach for many years. I invest our long-term savings in multi-manager funds to gain exposure to top managers bypassing their usual multi-million minimum subscription. β€œMy multi-manager” experts monitor investment risk daily, hedge specific short-term market shifts, and make sub-asset class reallocations. Diversification has always been a success factor when investing for the long term, and this comes naturally at a justifiable cost for before mentioned benefits.

Source: LinkedIn

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Graphic contrasting traditional banking methods with multi-manager expertise in wealth management, highlighting their respective advantages and strategies.

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