IT ASSET MANAGEMENT COMPANY
This is excellent company that helps its clients to invest into securities from the clients’ pooled funds. This helps in matching the declared financial objectives. In the process, such companies provide investors more investing opportunities and options and also more diversification. These opportunities and options are more than the clients would have by themselves. IT asset management companies manage pension plans, hedge funds, mutual funds and also such companies earn more income by charging commissions and service fees to their clients.
The reason why IT asset management companies offer their clients more diversification is because they have more access to large pool of resources compared to what an individual would have on his own. To help investors avoid the requirements for investment that are usually required when a person purchases securities individually, such companies pool assets together and then they pay out proportional returns. In the end they help their investors be able to invest in larger securities with only a small investment.
Understanding IT Asset Management Companys’ Fees
The way IT asset management companies charge their clients is through set fees or in other cases they charge them using a percentage on the total asset under their management. For instance, an IT asset management company can charge a client a commission fee of 2% on an investment of four million dollars, this means the IT asset management company owns eighty thousand dollars of that investment. When the value of the investment increases to let’s say five million dollars, the IT asset management company ownership value of that investment will also increase to a hundred thousand dollars and also if the value also falls, the ownership value of the IT asset management company will also fall as per the fall down percentage. In other cases, an IT asset management company may combine percentage based fees with flat service fees.
How Do Such Companies Work?
Due to the nature and ways that IT asset management companies work; they are usually called buy-side firms. In simpler terms, it just means that they help their clients buy securities and invest their money. They way IT asset management companies decide on what to buy is based on data analytics and in-house research.
Brokerage Houses and Fiduciary AMCs
Examples of IT asset management companies are fiduciary firms and brokerage houses. There is a difference between these companies. Brokerage houses accept any client. It doesn’t matter how much money that the investor wants to invest in the company though they have a legal standard that helps them provide and administer suitable services. They make the best effort to manage the investors funds wisely and hence they are not responsible if a client loses his or her money. Fiduciary firms are a bit different in that they invest their client’s funds in more responsible way in a range of assets. They have a higher legal standard. They act for the benefit of their clients. They also have higher investment thresholds and also don’t charge commissions but charge service fees. The richest families in America use fiduciaries.