- At the beginning of the engagement, the fund manager in consultation with the client will prepare an Investment Policy Statement which will act as the blueprint for investing client funds and will among other matters cover the risk profile of the investor, the return requirement of the investor, the time horizon of the investor and any other constraints or special considerations for the investor.
- This Investment Policy Statement will be reviewed every year to take account of changing investor needs.
- The Fund manager invests client funds in accordance with the specific investor’s Investment Policy Statement.
Monthly consultation with the client
- The fund manager provides the client with a monthly report showing the existing investments, the return achieved in the month and how this compares with agreed target return and the proposed investment for the coming month
- During this meeting, the investor will have an opportunity to make comments and suggestions on the achievements of the month and on the proposed investments for the coming month.
Monthly statement from the custodian
- In addition to the monthly report from the fund manager, the investor also receives a monthly statement from the custodian confirming that they are holding, on behalf of the investor, the investments that the fund manager has indicated in his report.
- The monthly statement from the custodian confirms to the investor that their assets are safe and do indeed exist.
- The investor has the freedom to query from the custodian to make any clarification on the monthly statement received.
Custodial account can be used for other investments
- It is important to note that the investor can move other investments into the custody account and that the custody account is not restricted to the specific investments that are managed by Madison Asset.
- Indeed, holding investments through a custody account has many benefits and is likely to be the way of the future.