Assets Under Management (AUM)

Definition

Assets Under Management (AUM) refers to the total value of financial assets that an entity—such as an asset management company, an investment fund, or a bank—manages under a mandate or advisory agreement on behalf of its clients. This measure generally includes assets such as:

• Financial instruments: equities, bonds, funds, derivatives.

• Cash and investable deposits.

• Alternative assets: real estate, private equity, hedge funds.

• Structured products and wealth planning solutions.

AUM is a key performance indicator that reflects:

• The size and financial strength of the entity.

• Client confidence in its management capabilities.

• The quality of advisory and investment services.

AUM fluctuate based on:

• Net inflows and outflows (subscriptions and redemptions).

• Market performance.

• Changes in asset valuations.

AUM and Private Banking

In the context of private banking, assets under management represent the total financial holdings managed on behalf of high‑net‑worth individuals, families, or private institutions. They include:

• Customized investment portfolios (equities, bonds, funds).

• Structured products and wealth planning solutions.

• Real estate assets managed through the private bank.

• Other tailored investments suited to wealth management.

AUM in private banking is a strategic indicator, illustrating:

• The bank’s ability to attract and retain wealthy clients.

• The quality and sophistication of the services offered.

• Its competitive positioning in the wealth management market.

Useful Distinction

• AUM (Assets Under Management): assets managed under a mandate or advisory relationship.

• AuA (Assets Under Administration): assets administered without active management (e.g., custody services).