Fiduciary management is essentially about maintaining funds for a special purpose, usually in the sense of pensions. It serves a variety of purposes, most especially when it comes to accounting and taxes. Part of how it breaks down and what it actually is comes from why it was first introduced.
It was thought up years ago by Anton van Nunen. He thought up a way to assist companies in handling their allocated-cash-reserves with accuracy and security. By offering the idea of asset management, it acted as an insurance policy should anything happen to the company and the pension fund (or whatever the reserved is for). It became popular immediately and companies still use it today.
There are two parts to the fiduciary market, and the first of those is consultants. When a company seeks asset management and wishes to design a plan to handle their money, the consultants see that it gets done. The other section, the asset managers, are where they get their orders from.
The second part of the market is known as the asset managers. They are the ones that meet with the company board/trustees and offer advising for managing the company's assets. They build the plan and propose the actual investment. A typical company choosing asset management puts several million dollars at these manager's disposal.
Because of these several millions of dollars being taken care of, there is so much math and translation that can go wrong, causing a loss of up to thousands of dollars. Smaller companies that have smaller reserves typically don't have this problem. For them, it would be far less beneficial for their individual finances to spend that much extra for the help. Larger, more powerful companies can usually afford it, and not doing so could end up being far more expensive in overall losses. Whether to outsource or not is entirely based on the financial size of the company.
Typically, the corporate giants of the world are the ones that utilize third-party asset-management contracts, but there are thousands of these giants. The dutch fiduciary market, for example, handles around $400 billion (or 300 billion euros) each day. That's just an example of what level of funds we're talking about.
The sums of money that are handled in fiduciary management are so vast that they need to be protected. Companies of incredible size can have hundreds or thousands of employees that have benefit plans. Having the company's financial reserves monitored and managed protects those plans, and therefore protects the hundreds/thousands of employees. A smaller employee base (and therefore smaller company funds) has a significantly lower risk for financial danger. But larger companies may not have the luxury, making asset management, basically, a necessity.
It was thought up years ago by Anton van Nunen. He thought up a way to assist companies in handling their allocated-cash-reserves with accuracy and security. By offering the idea of asset management, it acted as an insurance policy should anything happen to the company and the pension fund (or whatever the reserved is for). It became popular immediately and companies still use it today.
There are two parts to the fiduciary market, and the first of those is consultants. When a company seeks asset management and wishes to design a plan to handle their money, the consultants see that it gets done. The other section, the asset managers, are where they get their orders from.
The second part of the market is known as the asset managers. They are the ones that meet with the company board/trustees and offer advising for managing the company's assets. They build the plan and propose the actual investment. A typical company choosing asset management puts several million dollars at these manager's disposal.
Because of these several millions of dollars being taken care of, there is so much math and translation that can go wrong, causing a loss of up to thousands of dollars. Smaller companies that have smaller reserves typically don't have this problem. For them, it would be far less beneficial for their individual finances to spend that much extra for the help. Larger, more powerful companies can usually afford it, and not doing so could end up being far more expensive in overall losses. Whether to outsource or not is entirely based on the financial size of the company.
Typically, the corporate giants of the world are the ones that utilize third-party asset-management contracts, but there are thousands of these giants. The dutch fiduciary market, for example, handles around $400 billion (or 300 billion euros) each day. That's just an example of what level of funds we're talking about.
The sums of money that are handled in fiduciary management are so vast that they need to be protected. Companies of incredible size can have hundreds or thousands of employees that have benefit plans. Having the company's financial reserves monitored and managed protects those plans, and therefore protects the hundreds/thousands of employees. A smaller employee base (and therefore smaller company funds) has a significantly lower risk for financial danger. But larger companies may not have the luxury, making asset management, basically, a necessity.
