Association for Financial Professionals (AFP) Practice Exam 2025 – All-in-One Guide to Master Your Certification!

External asset managers are typically contracted to assist organizations in managing their investment portfolios. They bring specialized expertise and resources that organizations may not have in-house. One of the key aspects of external asset managers is that they do not perform all roles in treasury independently; rather, they work alongside the organization's treasury team and other financial professionals. Their responsibilities include managing investment portfolios and providing insights into market conditions and investment strategies, which bolsters the organization's overall financial strategy.

The statement about performing all roles in treasury without assistance is inaccurate because external asset managers collaborate with the organization's internal financial team rather than operate in isolation. They provide crucial support and guidance, ensuring that investments align with the overall financial goals and risk tolerance of the organization. This collaboration enhances decision-making and investment performance, making it clear that their role is supplementary, not standalone.