The four pillars of objective wealth and asset management
TAMRIS believes that the management of assets to meet
lifetime financial needs should be based on the four pillars of
asset and liability management.
These are structure, valuation, management
and modelling supported by advanced risk profiling and
integrated within sophisticated asset and wealth management
Portfolio structure - Structure
The structure, planning and
management of assets should be directly related to the
investor’s lifetime liability profile at a point in time
and over time. .
Asset management – Valuation & Management
The management of excess
risk and excess return is critical to the ability to
manage lifetime financial needs. If you cannot value,
you cannot allocate, nor can you manage risk and return.
Simple arguments regarding asset allocation and
investment timing are dangerous mandates for those
without valuation expertise as are the simple systems
that facilitate their delivery.
The management of assets
requires expertise in areas of valuation, allocation,
security selection, portfolio construction, risk and
return management and economic analysis. Asset
management research is not a secondary function.<![if !vml]><![endif]>
Modelling - Modelling
That the assumptions used to
model ability of assets to meet lifetime financial needs
should be conservative, reflect market and economic
risks to return and be independent of assumptions used
to determine allocation and strategy.
Liability risks, the effect
of significant stock market and economic risk on the
ability of assets to meet needs is the most important
risk to an investor. Performance risks of an investment
style is the second most important determinant of
portfolio structure. Aversion to monthly price
movements, or standard deviation, is the 3rd most
There should be a direct
relationship and accountability between the asset
management decisions, the systems that deliver them and
the planning process in which they are implemented.