Placements: how to fight against the negative influence of cognitive biases
Assistance from a co-pilot One can distinguish two types of “assisted” management. There is, on one hand, advisory management, where all financial operations are decided by the investor. In this case, they are assisted by an advisor who can anticipate and suggest transactions on securities, funds, or trackers but who does not carry out any operation without prior agreement from the investor.
“The investor remains in control of their investment decisions. They are, in a way, assisted by a co-pilot who advises them but they retain control over their decisions. Deutsche Bank offers this service while fewer and fewer banks still provide it,” notes Vincent Verhulst.
In addition to advisory management, the investor can opt for another form of management, discretionary management. In this case, they operate within a delegated management framework entrusted to a specialist who carries out all operations in the portfolio without prior reference to the owner. This expert can manage either a SICAV (mixed, with a specific profile, for example) or directly a portfolio composed of individual securities, funds, or trackers.
“In discretionary management, we focus on explaining the operations we have initiated in the portfolio for purchase or sale. If we do not carry out operations on certain positions, we also provide an explanation,” adds Vincent Verhulst.
Investments in bonds: should high yield be favored? Keeping an eye on transparency The investor will then pay attention to the form that this discretionary management can take depending on the institutions that offer it. In some cases, it often involves an offering of a few funds that vary according to the risk profiles of investors and their investment horizon.
“In our case, we offer multiple solutions with a range of 1800 funds that can be integrated into investor portfolios alongside trackers or individual securities. We can also build portfolios invested solely in stocks, for example,” highlights Vincent Verhulst.
In all cases, the private banker must establish the investor’s profile, their risk aversion, and their investment horizon. The investor must, on their part, be very transparent with their banker about their assets, return goals, estate planning, in order to build a portfolio that best suits their expectations and risk profile.
“Before choosing a private banker, a detour through the specifics of the offering, performance, and management fees is highly advised.”
Choosing advisory or discretionary management allows for a trusted intermediary who can also be in contact with the next generation to guide them in their investment choices. It is worth noting that at Deutsche Bank, these services are available starting from 100,000 euros in advisory management and 25,000 euros in discretionary management.
Before choosing a private banker, a detour through the specifics of the offering (expanded or focused on a few funds), performance, and management fees is highly recommended.
