• The principle of accurate consulting
• Duties in detail
• Responsibilities of the asset manager in principle
• Breach of contract
• Damage
• Causation
• Indicators of faulty asset management

Duties in detail

The asset manager may only accept the mandate if he is adequately qualified and has a reasonable organization and the necessary tools in place.

The asset manager`s duties comprise:

Client profile (Know-Your-Customer): The asset manager is to talk to the client in person in order to gain an overview of the client`s living conditions. He especially must clarify his client`s ability and willingness to take risks. Information gathered and any conclusion drawn from it are to be summarized in a written know your customer report;

Duty to keep records: The mandate for asset management, the client profile and any special instructions given by the investor must set down in writing;

Choice of investment type:  The asset manager is to suggest the type of investment which best matches the client`s requirements as revealed by the client profile. He must discourage the client from any unreasonable investment;

Consulting and clarification: The asset manager is to clarify in detail any risks arising from investment strategies which he suggests further to the client profile;

Gathering of information: Information for preparing an investment strategy is to be gathered carefully;

Reduction of risks: The risk of stock market development should be minimized by using approved investment guidelines and in particular in order to avoid concentrations of risk sufficient diversification should be undertaken.

Monitoring: The assets under management must be monitored constantly in terms of the agreed investment objective and the risk profile. If the investor’s profile changes from the initial position then an adjustment of the investment strategy must be considered.

Being answerable and criticism: Special instructions are to be adhered to. However, if instructed unreasonably or contrary to the agreed upon terms, the client must be put on notice. Any implementations of unreasonable instructions have to be declined.

Avoiding conflicts of interest: Conflicts of interest are to be avoided. When it comes to unavoidable conflicts, a reasonable balance of interest is to be created. Recessions are to be disclosed in advance or handed over.

Written Accountability: The asset manager has to account in writing. Accounting statements and performance reports have to be sent periodically to the investor to deliver a constant periodic representation for comparison purposes. The asset manager must develop performance reports in accordance with his  professional knowledge.