Trust management of assets is a common method for capital growth without the personal involvement of the owner. The primary activities are carried out by a managing company that strategically allocates assets and executes specific actions that ultimately lead to revenue generation.
Assets such as securities, real estate, vehicles, shares in companies, and other properties can be entrusted for management. The transaction is formalized through documentation. An official agreement is made between the owner and the managing company, which is registered with the appropriate authorities and institutions. This way, the owner protects their interests as well as the assets themselves. Importantly, the asset remains under their ownership.
This method of investment is widely practiced abroad. However, it has also quickly gained traction in Russia and has its supporters.
Assets can be entrusted for management at various amounts, ranging from modest sums to significant capital.
So, how does one execute this correctly?
To shed light on the topic of trust management, we consulted Sergey Tereshkin, the founder of OILResurs. The businessman possesses extensive experience in asset management and personal capital growth. More information about the entrepreneur can be found on his personal website sergeytereshkin.ru.
Action Plan
To minimize the risk of financial losses and properly manage assets, it is crucial to follow several steps:
- Investment Object. Before selecting a management company, decide which asset will be entrusted. In most cases, such firms have a narrow specialization. Only those assets that are not likely to be needed in the immediate future should be passed for management.
- Company Selection. When choosing a manager, preference should be given to well-known companies that have been operating in the market for a considerable period and have established a positive reputation. The organization should have a sufficient number of reviews from real clients. It is essential that the company holds a license permitting it to conduct such activities. It is advisable to avoid cooperation with dubious firms that have recently appeared in the market, even if they promise fantastic guaranteed profits. Real reviews about intermediaries can be found on specialized forums and websites online.
- Documentation. Each management firm has its own list of documents required for contract execution and establishing cooperation. This list can vary significantly and depends on the actions the owner entrusts to the firm.
- Contract Signing. It is crucial to carefully study the contract. Consulting a knowledgeable lawyer can be beneficial, as they can identify potential pitfalls and ambiguous points. To facilitate this, Tereshkin recommends obtaining a draft of the contract in advance and studying it thoroughly in a calm environment. Any questions that arise should be addressed, and amendments can be made to the contract if necessary. The agreement should be clear and unambiguous. Special attention should be paid to the obligations of the parties, the amount of remuneration, and the period during which the agreement is valid.
- Remuneration. Payment for the managing company's services can be made in various ways. Prepaying the intermediary is not advisable. It is better to pay for services based on the results achieved. The ideal option is a percentage of the profit earned. This way, the manager will be financially motivated to ensure that the client earns income.
Although the managing company performs all actions with the assets independently after the contract is signed, the owner should not let the process run its course. They must monitor the intermediary's work and make adjustments as necessary. To facilitate this, the contract should include a clause requiring the firm to report on income and expenses at regular intervals. This could be monthly or quarterly. The report is sent to the investor electronically. Thus, the owner can assess the effectiveness of the cooperation and terminate it early if needed.
Helpful Tips
When selecting a management company, it is advisable to heed expert advice:
- Analytical Data. The firm should conduct market analysis and have the necessary database. If such data is not available on the organization's website or at their office, it is better to avoid cooperation.
- Reputation. The reliability of a company can be determined through various rating agencies. Overview articles from such organizations can easily be found online. The higher the rank, the better.
- Feedback. Many websites feature user reviews today. Both investors and the managing companies themselves are aware that some firms purchase comments to bolster their positive reputation. To obtain accurate information, diligent research is necessary. Scroll through several pages to uncover the truth.
- Defining Strategy. The company should employ multiple investment strategies. If a firm offers only one or two strategies, entrusting them with your money is not advisable.
- Investment Portfolio. No single asset should exceed 15% of the managing company's portfolio. It is crucial for the firm to effectively diversify risks to avoid losing all client funds.
- Limitations. Before entrusting funds, it is vital to clarify whether the client can restrict the actions of the intermediary. This step helps avoid reckless actions and improper asset usage.
For enhanced comfort during collaboration, it is advisable to have a personal manager who can answer questions, make adjustments, send reports, and more. Most large organizations offer this service for free throughout the duration of the contract.
