Assets Under Administration - AUA
  
Categories: Mutual Funds, Index Funds, Investing, Managed Funds
A company that provides financial services might report the value of the assets they have under administration using a statistic called "assets under administration," or AUA, (a name without much panache in our opinion).
A key comparison here is with assets under management. AUM, as it's also called, measures the value of assets a financial service company manages for its clients. In this case, the company actually controls the assets - it buys and sells the stocks or bonds or whatever, making direct investment decisions with capital provided by clients.
AUA works differently. The assets in an AUA situation are still controlled by the clients themselves. The financial service company simply provides what's called custodial services.
In most walks of life, "custodial services" responds to the stuff janitors do - taking out the trash, sweeping the floors, unclogging the toilet. Think of "custodial services" in the context of assets as the financial equivalent to that. It can include stuff like overseeing tax-related functions or providing accounting services.
It can also include a different context of "custodial," like having custody of something. The assets measured in the AUA figure includes assets that the company holds in custody for clients, though the firm doesn't actively manage the asset.
So, the company holds the stock certificates or the bonds for the client, and can sell them at the client's request. But the firm wouldn't make any decisions without the client instructing them to do so.
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![Finance: What is a Diversified Mutual Fund?](https://media1.shmoop.com/video/thumbnails/COURSE.FINANCE.733_770x433.jpg)
Finance: What is a Diversified Mutual Fu...20 Views
finance a la shmoop what is a diversified mutual fund? all right people
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everywhere energy, telecom, insurance, real estate, banking, chemicals, tech, retail not
enough diversity yet well those are just sectors or industries and there's a
whole bunch of them what about geography geographic diversity the US, Russia, China
Europe someday maybe Mars Elon what do you think well maybe exposures to [Elon Musk floating in space]
different currencies or commodities cycles as the diversity you seek hmm
well that's diversity Benetton eat your heart out so the bigger question is why
would you want such diversity? well the idea is that you mitigate risk by being
diverse the don't put all your eggs in one basket thing if one investment goes [Value of investment graph appears]
bust well at least you have plans B C and D to fall back on and if this is
grabbing you check out our videos on efficient markets theory for more on the
subject or maybe diversify your knowledge and watch all of our finance
videos food for thought and you know please click on the ads that we got to [Man holding begging sign]
eat around here
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