Use Case: Asset / Wealth Management Advisory Risk
Asset Management consists of an array of bank services, such as custody, investment management, trust and estate administration, retirement plan administration and participant recordkeeping, and corporate trust administration. The types of Asset Management customers serviced by a bank are diverse (e.g., individuals, retirement plans, corporations, mutual funds, investment managers, insurance companies, endowments and foundations), as are the capacities in which a bank acts on behalf of these customers (e.g., trustee, agent, or custodian). Many of these customer and account types have specialized legal, processing, accounting and reporting requirements.
Asset Management operations serves as the “back office” for a bank’s Asset Management activities and plays an important role in fulfilling a bank’s strategic goals. Asset Management operations should implement efficient processes and systems capable of supporting the types of Asset Management accounts, clients, and assets that the bank services. These processes and systems should be capable of providing timely and detailed account information to management, customers, regulatory agencies, and other authorized parties, such as accountants or co-fiduciaries.
Asset Management operations moves and controls cash balances, marketable securities and tangible assets. This results in a heightened risk of loss due to error or theft. The market volatility of assets being processed may increase the impact of such losses. As a result, a strong system of internal controls is required. In addition, Asset Management operations often supports systems and processes integral to overall risk management and compliance processes for Asset Management services.
Who Should Assess the Risk? Trust Compliance Officer, Advisory Management Officer, Chief Financial Officer, Trust Managers