Investment advisory services subsidiaries play a crucial role in the operations and success of parent financial services companies. As subsidiaries, they provide specialized advisory and asset management services to clients while leveraging the scale and resources of their parent groups. This allows them to offer a wide range of investment products and solutions tailored to meet specific client needs and risk profiles.
Legal and compliance obligations
As registered investment advisers (RIAs), subsidiary companies have a fiduciary duty to act in the best interests of their clients. They must put clients’ interests ahead of their own and disclose any potential conflicts of interest. Compliance requirements also include adhering to securities regulations, maintaining proper registration status, implementing controls around trading activities, as well as safeguarding client assets and data.
Investment strategies and offerings
Subsidiaries develop and manage specialized investment strategies based on different asset classes, market sectors, geographies, and risk profiles. Common offerings include equity and fixed income strategies, alternatives, multi-asset solutions, and customized accounts. Performance and risk analytics teams support the strategies.
Technology integration
Leveraging parent company technology investments and capabilities allows subsidiaries to provide state-of-the-art solutions. This includes trading platforms, portfolio management systems, data analytics, as well as client reporting. Ongoing tech upgrades and cybersecurity measures are also implemented.
Talent recruitment and development
As centers of expertise, subsidiaries recruit and develop specialized advisory talent across investments, research, operations, compliance and technology functions. Career development opportunities also allow migration of talent between subsidiaries to share best practices.
In summary, investment advisory subsidiaries of financial institutions play a key role in driving business through specialized services, while integrating critical firm-wide functions around technology, operations, risk and compliance.