ADVISORY MANAGEMENT Meaning and
Definition
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Advisory management refers to a type of investment management service offered by financial institutions or professionals to provide advice and guidance to individual or institutional clients regarding their investment portfolios. In this arrangement, the client retains ownership and control of their investments, while the advisory manager provides recommendations and strategy suggestions based on their expertise.
The primary objective of advisory management is to assist clients in making informed decisions about their investments, aiming to enhance returns and minimize risks. The advisory manager conducts research, analysis, and market evaluation to identify investment opportunities and formulate an appropriate strategy that aligns with the client's objectives, risk tolerance, and time horizon. They offer advice on asset allocation, portfolio diversification, investment selection, and timing decisions.
The advisory manager typically charges a fee for their services, which can be based on a percentage of the client's assets under management or a fixed rate. This fee structure differentiates advisory management from other forms of investment management, such as discretionary management, where the manager has discretionary authority to make investment decisions on behalf of the client.
Clients engaging in advisory management benefit from professional expertise, as the advisory manager's role is to stay informed about market trends, economic indicators, and various investment vehicles. The client retains ultimate decision-making authority and can choose to accept or reject the recommendations provided by the advisory manager.
Overall, advisory management offers individuals and institutions access to professional guidance, research, and expertise, facilitating the development and management of a personalized investment strategy tailored to their specific needs and preferences.
Etymology of ADVISORY MANAGEMENT
The word "advisory" has its roots in the Latin word "advisare", which means "to give counsel". The term "management" comes from the Latin word "manus", meaning "hand", and "agere", meaning "to lead or conduct". So, the etymology of "advisory management" suggests that it refers to the act of providing guidance or counsel in leading or conducting something.
