wealth management risks
Investing & Retirement

Asset Management Risks

September 27, 2021 - Benjamin Manz

Investing your assets comes with a long list of risks. Get informed about possible asset management risks here.

Overview of common investment risks in asset management:

1. Human error

Even the most careful people do make mistakes from time to time. A broad range of disasters can result from human error. Incomplete or incorrect completion of mandates to your asset manager or sending communications too late can have grave consequences for you as an investor. In investing, time is money, and getting the timing of a transaction wrong can earn or cost you a fortune.

2. Market risks

Market rates can change at any time, and it is difficult if not impossible to accurately predict these changes. The risk is amplified by the fact that even local markets are influenced by macroeconomic fluctuations on a global level. Market risks can usually be divided into these categories: interest rate risks; currency-exchange and currency risks; commodity risks; stock risks; the added risks associated with alternative investments, structured products and derivatives.

3. Location-based risk

Developments on a national and international level pose a constant threat to investors. The political and economic development of a country directly affects national markets and investments made in those markets via stocks, index funds and other financial instruments.

Investing in politically unstable countries involves higher levels of risk. Location-based risks also include transfer risks: changes to legal systems or political relations can make it impossible for you to transfer securities from a country in which you have invested to an exchange in another country, or to the country in which you reside.

4. Credit and counterparty risks

The terms “counterparty risk” and “issuer risk” refer to the risk that the creditworthiness of the entity buying from you or selling to you in a transaction will decline. In the worst case, the counter party may not follow through on their end of the bargain at all, either deliberately or because they are unable to.

The price of bonds, for example, can drop if the issuer’s creditworthiness declines. If the issuer becomes unable to make good on a bond (in the case of bankruptcy, for example), the bond may become worthless.

5. Market liquidity risks

A market becomes illiquid if demand for securities or other assets falls, or if the owners of certain securities refuse to sell. It can become very difficult to buy or sell all or even some of your assets in an illiquid market. This risk is most acute in alternative investments, real estate and private equity.

More on this topic:
Compare Swiss stock brokers now
Compare Swiss asset management services now
Independent asset managers explained

Request now without obligation

Choice of digital asset managers

Robo advisor

True Wealth

  • BLKB as partner and custody bank

  • Flat fee: 0.5% - 0.25%

  • Free test account

Robo Advisor


  • Digital asset manager

  • An offer from the bank CIC

  • Free test account

Digital asset management


  • Digital financial assistant

  • Free investment plan

  • Free test account

Request now without obligation

Swiss wealth managers

Digital Private Banking

volt by Vontobel

  • Access to Vontobel investment experts

  • Individually selectable investment products

  • Information without obligation

Robo advisor

Bank CIC cleverinvest

  • Digital asset manager

  • Flat fee of 0.5%

  • Already from CHF 1000

Online wealth management

PostFinance E-Investment Management

  • Digital wealth management

  • From CHF 5000

  • Direct opening possible

Wealth managers in comparison

Find the most favorable wealth management now

Compare now for free
Online trading brokers in comparison

Find the cheapest online broker now

Compare now
Expert Benjamin Manz
Benjamin Manz is CEO of moneyland.ch and an independent expert on banking and finance.
Free subscription

Sign up for the free newsletter

Subscribe now
more than 3 million pieces of data

Find all comparisons here

Go to comparisons