Personal Asset Management
The History of
Personal Asset Management
Personal Asset Management was founded in Switzerland in 1987, mainly as a company to manage family funds. Personal Asset Management founder Thomas Stucki studied economics and started to manage assets in 1973. When he founded the company, he brought with him all portfolios privately managed until then. Today, Personal Asset Management offers clients from around the world a solid alternative to conventional portfolio management by Swiss banks. Well-to-do private persons form Personal Asset Managements dominant client segment, followed by firms, pension funds and charitable institutions.
Thomas Stucki, owner of Personal Asset ManagementPersonal Asset Management has an irreproachable reputation. In 1990, the company became known on a wider basis when it pioneered ethically screened investments in Switzerland (compare Ethically Screened Asset Management and Presence in Print Media). In 1995, Personal Asset Management was further acknowledged with the introduction of its pioneering fee structure, which was publicized through a whole-page advertising campaign in national print media and led to a broad press coverage on this theme (compare Professional Fees and Presence in Print Media). With a similar campaign in 1997, Personal Asset Management highlighted its asset management performance (compare Presence in Print Media). In 2000, and according to the Swiss Law Against Money Laundering, the company became a member of the Polyreg self regulating body.
The Services of Personal Asset Management
In comparison with conventional portfolio management by banks, the services of Personal Asset Management are highly personalized and individualized. Despite all the growth since its foundation, the company has maintained its familiar character and its high level of service. Business relations and personal contacts are typically maintained for numerous years with our clients, many of whom have been with us from the outset. The owner knows every single client personally and is personally responsible for all investment decisions. This personal touch is the key to successful business relations on an ongoing basis, a continuity which saves clients the trouble of ever-changing portfolio advisors so typical of banks.
Another benefit compared with banks is that Personal Asset Management is an independent company. This means that all investment decisions are taken in the clients' sole interest. Bank portfolio advisors, on the other hand, are in a continuous clinch between client interests and bank interests (such as trading commissions, in-house investment funds or securities of companies with close ties to the bank, to name but a few).
One of the special services of Personal Asset Management is ethically screened asset management. This kind of asset management originated in Anglo-Saxon countries and was pioneered in Switzerland by Personal Asset Management in 1990 (compare Presence in Print Media). It adds an ethical dimension to conventional investment selection criteria such as yield or safety, thus evaluating the environmental attitude of a company and its relations with associated people.
Personal Asset Management splits this kind of evaluation into negative and positive criteria. On the negative side are companies connected with weapons, nuclear technology, gambling, tobacco, alcohol and media of a pornographic or violent nature, as well as companies implementing superfluous tests on animals or companies with notorious ties to totalitarian governments slighting human rights. On the positive side are companies which offer products or services with a positive impact on the environment, as well as companies with a clear focus on the sustainability of their production, environmental issues and a conscientious attitude towards their employees.
Thomas Stucki: "Think green!"
No sooner introduced by Personal Asset Management, the idea of ethically screened investments was copied immediately by banks, insurance companies and other providers. Today, "green" investments hold a firm place within the Swiss investment scene. However, Personal Asset Management stands out in several regards:
Firstly, Personal Asset Management does not accept lower yields. Many other forms of ethically screened investments demand of their investors that they accept lower yields or even forego any yield for the sake of a good cause. Personal Asset Management however expects the same yields of ethically screened investments as of conventional investments, and its long experience in this field has clearly shown that this is feasible.
Secondly, Personal Asset Management does not accept higher risks. Some other forms of ethically screened investments offer venture capital for young companies or new projects. This means a higher degree of risk, since the success of any new project or young company is far from assured. Personal Asset Management however limits its investments to solid companies of a certain size which are quoted on a reputable stock exchange.
Thirdly, Personal Asset Management's ethically screened asset management covers a broader spectrum than common "green" investments, since it invests not only in profitable environmental technologies, but also in other companies with a clearly positive impact on the environment.
Approximately 10% of Personal Asset Management clients want their asset management to be ethically screened, the remainder opting for conventional asset management. But even for these latter clients, Personal Asset Management avoids investing in companies infringing the negative criteria stated above, unless a client gives other instructions.
All assets managed by Personal Asset Management remain deposited in clients' own bank accounts. Of course, clients may determine their custodian bank themselves.
Zürich, financial metropolis of Switzerland
At the beginning of a relationship, it is crucial to determine the individual asset management objective together with each client. This may include tax and legal aspects, too. Once the asset management objective is identified, the investment guidelines necessary to achieve it are fixed. Objectives and guidelines can of course be changed at any time according to the clients wishes and interests.
After determining the clients bank connection in a next step, (compare The Bank Connections of Personal Asset Management), a limited power of attorney then enables Personal Asset Management to manage the client's portfolio according to the guidelines agreed upon. Such a limited power of attorney precisely specifies the kind of asset management Personal Asset Management is to be entrusted with, and does not empower the entrusted party to make any deductions whatsoever from the account.
As soon as all formalities are taken care of and assets are deposited in the clients custodian bank account, Personal Asset Management commences its management mandate with a view to long-term growth. Once the portfolio is invested, the investments are typically retained unless no longer appropriate. Whilst every portfolio is updated and surveyed daily, switches take place only when necessary. This approach of continuity helps to keep transaction costs low, too.
For ethical reasons, Personal Asset Management does not reserve its services for a high net worth clientele, in contrast to many other asset management companies which strictly require a certain minimum size portfolio. However, the long-standing experience of Personal Asset Management has shown that portfolios under approximately CHF 500,000 or equivalent in other currency are definitely more difficult to manage than larger portfolios, mainly because the risks cannot be spread sufficiently. The smaller a portfolio, therefore, the more the performance tends to fluctuate. Consequently, especially smaller portfolios necessitate a thorough preliminary discussion of risk aspects when establishing assets management objectives and guidelines.
Moreover, banking costs such as transaction fees tend to weigh heavier on a small portfolio, relatively speaking. In other words, smaller portfiolios entail relatively higher costs than larger portfolios, and thus tend to hamper performance.
Safety and Performance
Compared to banks, Personal Asset Management is a relatively small operation. However, business relations with Personal Asset Management are by no means more risky than with a bank. The only possible risk incurred when doing business with Personal Asset Management might be insufficient performance, which is the same with any other asset management institution. Most new clients come to Personal Asset Management on recommendation of existing clients who have already formed an idea of performance. New clients should allow some years to evaluate performance themselves, since Personal Asset Management's investment strategy aims at long term growth.
Performance greatly depends on factors such as in which currency performance is measured, and whether banking fees are included or not, etc. Moreover, performance should be seen in connection with the risk incurred to achieve it, and should be compared to a meaningful benchmark. As long as no internationally agreed performance assessment standards are applicable, thus enabling true comparison with competitors, Personal Asset Management does not publish its performance track record. Suffice it to say here that Personal Asset Management has generally out-performed the market over the years. Exact performance data is available upon personal contact.
Clients of Personal Asset Management have the certainty that their portfolios are invested as carefully as the family portfolios on which the company was founded. Investment guidelines are strictly observed, and clients keep full control of their assets. They receive the original bank correspondence (which can of course be kept at the bank if desired), and can thus check all transactions and arrangements of Personal Asset Management. Clients naturally receive a detailed analysis of their assets and performance on a regular basis. They can dispose over their assets at all times, and Personal Asset Management's mandate can be terminated at any time (compare The Standard Asset Management Agreement of Personal Asset Management).
Thanks to Personal Asset Management's entirely new fee system pioneered in 1995 (compare Presence in Print Media), clients can select their preferred fee structure themselves. With its diversity of mainly performance-related fee structures, Personal Asset Management holds a unique position among Swiss banks and asset managers.
The most important fee structures are explained hereafter without going into excessive detail; the matter is already complex enough without ciphers, and moreover, fees depend on the size of the portfolio to be managed: the larger the portfolio, the lower the fee. It goes without saying that Personal Asset Management will provide exact quotes once the size of the portfolio is known.
Clients can choose first of all whether they prefer a performance-related or a management fee, or a mixture of both. Most clients choose a performance-related fee. For all performance-linked fee structures, the fee is calculated only on that part of the performance which surpasses any previously reached levels. In case asset management has led to a loss, this loss is carried forward and has to be compensated before any new performance-related fee is calculated.
Secondly, clients decide whether the performance-related fee is to be linked with a benchmark. It can be agreed, either, that the fee will only be due if this benchmark is surpassed, or, going still further, that the fee will only be due on that part of the performance, which is above the benchmark, whilst the performance below the benchmark will be free of charge. It goes without saying that the higher the benchmark, i.e. the more difficult it is to surpass that benchmark within the limits of the investment guidelines, the higher the fee calculated on that part of the performance surpassing the benchmark.
Unique are Personal Asset Management's fee schemes with a compensation clause. If a client chooses such a scheme, Personal Asset Management will share in a lack of performance (which, depending on the situation on the markets, can never be excluded completely) in a similar way it shares in a positive performance. Such schemes can also be linked with a benchmark.
For information, the following median fees apply for some standard fee schemes:
All further quotes as well as binding offers are available on request.
All mandates given to Personal Asset Management are regulated by a standard asset management agreement according to the guidelines issued by the Swiss Association of Asset Managers (SAAM). Investment guidelines also form an integral part of this agreement. Depending on the fee structure chosen by a client (compare Professional Fees) or other special arrangements, this standard agreement may need to be reformulated partly. Set out below is the standard asset management agreement of Personal Asset Management.
No changes to this agreement, or to the investment guidelines forming an integral part of the same, are valid unless in the written form.
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