Lecture 11 - WM & AM

Question 1

What is wealth managment

Answer 1

Service which banks offer to high net worth clients to help manage their money

Question 2

What is asset managment

Answer 2

Product that can be thought of as investment funds

Question 3

What are some typical asset managment products

Answer 3

ETFs’ and Mutual Funds

Question 4

Are WM and AM intertwind

Answer 4

Depends on the region, in Canada they are. WM can act as a channel for distribution for AM products

Question 5

Why are investment funds attractive (4)

Answer 5

Economies of scale, risk diversification across assets, small minimum investment, Lots of liquidity

Question 6

Are mutual funds more common for small investors or big invesmestors

Answer 6

Small

Question 7

Why has investment in Mutual Funds grown a lot in 1990s

Answer 7

New funds that were develped, Increased investment from baby boomers, pension plan shift to 401k

Question 8

Asset managers that achieved organic growth fell into what 4 broad categories

Answer 8

Large at scale manafacturers of passive investment strategies, alpha generators, investment solution innovators and distribution powerhouses

Question 9

What are some of the characteristics of the indutry that Credit Suisse operates in

Answer 9

Highly regulated landscape, competitive, Dual focus on private banking and IB, Dependance on economies of scale

Question 10

How would you characterize the private banking sector

Answer 10

Core strength and historical legacy,

Question 11

Why did CS fail

Answer 11

Poor risk managment (repeated scandals), unfocused strategy balancing IB and PB, Regulatory challenges such as stricter regulations, reputational challenges/loss of clients

Question 12

What trend has significantly influenced the asset management industry in recent years?
A. Decreasing demand for private-market investments
B. Increased allocation to private markets by retail investors
C. Regulatory incentives for defined benefit pension plans
D. Lower demand for innovation in investment solutions

Answer 12

A

Question 12

As of 2023, what is the approximate allocation to private markets in retail investor portfolios, and what is the institutional benchmark?
A. 5% for retail; 15% for institutional
B. 10% for retail; 25% for institutional
C. 20% for retail; 30% for institutional
D. 2% for retail; 8% for institutional

Answer 12

A