Deloitte’s Asset Management Profitability Planning Model is a financial model used for forecasting potential future investment management and expense streams for an asset management business. The model simulates revenues (fees) and expenses for an asset management company that invests client money in one or several of the funds that it manages. The model also calculates profitability for each of three asset management functions, which are fund management, investment management, and account management.
The Process Dashboard walks the user through the planning process from assumptions, to revenue and expense planning to YTD reporting.
The Profit Plan Assumptions dashboard allows the user to enter assumptions for client balances, fund fees, and investment returns.
The Plan Fund Balances and Revenue dashboard gives the user a summary of fee revenues and balances for the profit plan.
The Plan Allocated P&L dashboard gives the user a summary of the P&L plan for Fund Management, Investment Management, and Account Management.
The YTD Performance dashboard gives the user access to multiple YTD financial reports.
Each fund has different characteristics based on the strategy of the fund and the types of securities that are held in the fund. As an example, some funds invest client money in equity securities, some funds invest in fixed income securities, and some funds invest in a combination of two or more types of securities. The model allows for allocation to multiple investment types within each fund.
Client Account Planning by Fund
Client fund balances can be planned by selecting one fund or more than one fund based on investment objectives, which are typically a combination of multiple strategies based on target risk, diversification, and expected return.
Investment Returns by Fund Strategy
Returns are planned by fund strategy within each fund to allow for funds with multiple investment strategies, such as a combination of fixed income and equity.
Fee Planning and Revenue Allocation by Fund
Asset management companies typically receive fees from clients based on assets under management (AUM). Fees may vary by fund. Companies may also want to allocate revenues by fund and management function, which in this model is fund management, investment management, and account management.
Expense Planning by Department
Compensation and direct expenses can be planned based on departments for fund management, investment management, and account management.
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