An investment company has several clients for asset management at its discretion. Customers hold their assets with various banks and the Company has the power of attorney for each account. Asset allocation is mainly with mutual funds and ETFs.
Since the investment company has developed a more trade-intensive strategy, it wanted to add around 20 percent to its asset allocation.
Unfortunately, none of the banks used by clients offered direct market access. Thus, orders could only be placed over the phone and the fees charged by the banks were far more expensive than at Interactive Brokers. Therefore, it was almost impossible to include the new strategy in asset allocation.
Solution with iMaps
With issuing an ETI, we offered this investment company the optimal solution. The Investment Company manages the ETI directly at an IB account with a low fee. The company buys the ETI on the accounts of different clients. Thus, all trading activities in the ETI are executed at a much lower cost than through a direct allocation to each account.
Handling for the asset manager is also less complicated and the customer receives a higher return on investment due to the lower cost.