Summary: England And Wales

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• 11 England and Wales

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• Why has the asset manager's service a discretionary nature?

  The asset manager will be empowered by the investor to invest and reinvest the portfolio as the investor's disclosed agent without prior reference to, or consent from, the investor. 

• Where does the core service consist of?

  A duty to invest the client's assets in accordance with an agreed investment strategy.

• In which categories doe FSA enforcement cases against asset managers tend to fall?

  Failure to run systems and controls properly and failure to prevent individual fund managers from mismarking the values of transactions that they have entered into for clients.

• How will the interaction between asset manager and potential client prior to the conclusion of the asset management agreement?

  Exchange of information.

• What will the asset manager be required?

  To use reasonable care when making such pre-contractual statements, in the absence of which the manager's statements may give rise to an action for misrepresentation.

• Where is the investement manager responsible for?

  For providing that the finformatino is correct.

• Which precontractual duty does the asset manager have?

  A duty to advise the investor prior to the conclusion of the investment management agreement in relation to the suitability of the offered investment strategy, ie whether the investment strategy is right and appropriate for the investor's purpose and situation.

• What would be unreasonable for an institutional investor?

  For an institutional investor it would be unreasonable to insist that in appointing the investment manager, reliance was placed on an implied assumption of responsibility by the manager to ensure that the selected investment strategy was suitable for the investor in general. 

• What ought to be reasonable for the asset manager to assume?

  That an institutional investor is able to evaluate complex inestment proposals in the context of that investor's broader situation and purpose and is able financially to bear related investment risks.

• Which communications are normally not intended to be binding?

  Documentation or presentations prepared by the investment manager for the investor as prospective client.