AUA

Key Highlights

• AUA refers to the total market value of investments for which a financial advisor, wealth manager, or institution provides guidance or recommendations, without necessarily holding discretionary control over the assets.

• Benefits for investors and advisors includes transparency, informed decisions and scalable advisory.

What is Assets Under Advice (AUA)?

Assets Under Advice (AUA) refers to the total market value of investments for which a financial advisor, wealth manager, or institution provides guidance or recommendations, without necessarily holding discretionary control over the assets. Unlike Assets Under Management (AUM), where the advisor directly manages the funds, AUA represents assets where the investor retains ultimate decision-making authority.

Purpose of AUA

• Measure of Influence: Indicates the scope of advisory services and the trust placed by clients in the advisor’s recommendations.

• Market Insight: Helps financial institutions and advisors understand client engagement and potential growth in advisory services.

• Strategic Planning: Provides a framework for designing personalized investment solutions and capital allocation strategies.

How AUA Works?

• Client Portfolio Review: Advisors assess existing investments, risk profile, and financial objectives.

• Recommendations: Provide guidance on asset allocation, investment products, or market opportunities.

• Client Decision: Investors implement recommendations themselves, retaining ultimate control.

• Tracking Value: The market value of all assets under advisory is aggregated to calculate AUA.

Applications in Capital Markets

• Institutional Advisory: Used by banks, brokerage firms, and wealth management divisions to quantify advisory reach.

• Performance Benchmarking: Helps compare advisory business growth across different advisors or institutions.

• Portfolio Structuring: Facilitates tailored guidance in equities, fixed income, alternative investments, or derivatives.

Benefits for Investors and Advisors

• Transparency: Investors understand which assets are under advisory oversight.

• Informed Decisions: Access to professional insights without relinquishing control of assets.

• Scalable Advisory: Institutions can expand services to more clients while tracking AUA growth.

Risks & Considerations

• Non-Discretionary: The effectiveness depends on the investor acting on advice.

• Market Volatility: AUA values fluctuate with underlying market movements.

• Limited Control: Advisors cannot directly intervene in asset management decisions.