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How do the roles of advisor and strategy manager differ with regard to a portfolio solution?

Our clients are either advisors or strategy managers of portfolio solutions. What is the difference in this context? In this article, we will compare the two similar — but nonetheless different — profiles based on a Luxembourg portfolio solution.

Essentially, we differentiate between portfolio solutions based on bankable assets, such as liquid equities and bonds; or non-bankable assets, such as private equity and debt. The general principle regarding the two roles mentioned above remains the same, regardless of whether it is a securitization or alternative investment fund (AIF) solution.

The advisor always has a consultative role and therefore has no direct responsibility. They submit investment proposals to the strategy manager or the director of an operating company, who reviews and then implements them. The advisor’s fees can be paid either through the financial product or the strategy manager’s firm. The latter could serve as a facilitator for the advisor to implement their plans and ideas, since they lack licensing. In the case of non-bankables, the director of a sometimes-needed special purpose vehicle (SPV), which invests in the target companies, may be provided by the administrator of the product solution. However, this is very case specific, and certain workflows and responsibilities could also be delegated externally. Alternatively, in an Actively Managed Certificate (AMC) solution, which works without any operating company, the decision taker must be licensed.

The strategy manager is generally a licensed wealth manager in the case of Luxembourg portfolios on bankable underlyings and AMC solutions, and is therefore also directly responsible for the investments. This is usually also the case for AIF solutions up to EUR 100 million assets under management (AUM).

For a portfolio on liquid assets, an advisor can also team up with, or even be locally hired by, an existing and licensed strategy manager in order to gain the necessary legal status. The advisor gets their share through their company, who officially acts as the final decision maker and client of the structure. Certain advisors are more likely to be signal providers for automated investment strategies, but again, with a few exceptions, the same rules of the game apply when it comes to the need for licensing and thus a responsible party.

Through our broad expertise and our wide range of cooperation partners, we can assist you at every step of the way, from finding the right solution to getting your case well prepared to final realization, all without any surcharges on the solution providers’ offering. Please do not hesitate to reach out and make your appointment with us.



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