Asset managers are required by law to act in the best interests of their clients and to invest in accordance with a predefined set of rules and principles. Asset managers must therefore provide the information necessary for investors to make informed decisions and report regularly on how their investments are doing.
Asset managers will usually charge a fee which is based on the value of the assets they manage. In this way, the incentives of investors and asset managers for the fund to achieve positive returns are aligned.
Investors’ assets always remain the property of the investor and are held by third parties (called depositaries, custodians or trustees). In this way, they are kept safe and can be withdrawn or transferred to be managed by another manager, if necessary.