What is the difference between aum and aua

What is Diversified Mutual Fund? Diversified mutual fund allow individual investors to obtain the benefits of risk mitigation through diversificati What are mutual funds?

Mutual funds are an aggregation of stocks, professionally managed for a "small" fee. Investors wanting exposure to a given a What are the different types of mutual funds? There are many different types of mutual funds, including bond funds, equity funds, money market fund View all finance glossary. Related or Semi-related Video. Assuming that the break of the portfolio is as follows:.

Then the total market value of the assets under management would be INR crores. Sometimes the asset management companies also take into consideration the pension funds handled by them under asset under management formula. Also, sometimes overall cash, mutual funds, and fixed deposits are not considered. Instead, only the capital that can be traded by the executive on behalf of the client is calculated. For ex: — Changes in the price of a land in which money has been invested by the firm. Company Profiles.

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We and our partners process data to: Actively scan device characteristics for identification. I Accept Show Purposes. Your Money. Personal Finance. Your Practice. Popular Courses. Key Takeaways: Assets under administration AUA are the total assets for which a financial institution provides administrative services. Assets are owned and managed by the client while a third-party is the administration provider, typically a large bank or financial company.

Similarly, the SEC states that merely providing advice on an intermittent basis e. Click To Tweet. Thus, having discretionary authority to allocate client assets amongst various mutual funds which in turn have their own managers may still allow those assets to be treated as regulatory AUM. Similarly, using third-party managers e. In this context, the advisor should still only include accounts or portions thereof for which the advisor actually provides continuous and regular supervisory or management services — i.

However, the SEC does expect that the advisor is consistent in using the same values for AUM calculation purposes that are used to report values to clients e. Notably, when determining total AUM, the SEC directs investment advisers to calculate regulatory assets under management without reduced the value by any indebtedness associated with the account e.

From a regulatory perspective, the requirement to use gross assets, and including such a wide range of assets, was intended to prevent advisors from excluding assets to try to stay below the thresholds for registration and reporting systematic risk requirements after Dodd-Frank.

With recent high-profile fraud cases like Dawn Bennett , the SEC appears to be increasingly scrutinizing whether investment advisers are accurately stating their AUM. Notably, the mere fact that advice is being charged for on an hourly or retainer basis does not automatically disqualify the assets from being considered as regulatory AUM. But if the advisor is only charging for client-facing time, and no other time, it implicitly demonstrates that the advisor is not engaging in continuous and regular supervisory or management services.

In recent years, the growth of financial planning has increasingly broadened the scope of assets on which financial advisors provide advice. Nonetheless, assets on which the advisor merely advises and includes in the financial plan are not assets under management for regulatory purposes — which means they should not be claimed as assets under management at all.

In the broadest of situations, AUA might simply include the total net worth of all clients for which the financial advisor does financial planning or otherwise provides advice.