Developing a Risk Management Framework under the Asset Manager Code

As an asset manager, you are responsible for not only generating returns for your clients but also for managing the risks associated with the investment strategies employed. According to the CFA Institute's Asset Manager Code, effective risk management is a cornerstone of fiduciary duty. Imagine you are in a meeting with senior management where you are to present a comprehensive risk management framework that aligns with the Asset Manager Code. Your framework should address the identification, assessment, monitoring, and mitigation of risks, encompassing both operational and investment-related risks.

In your essay, explain how you would structure your proposed risk management framework. Discuss the importance of establishing a risk culture within the organization, and illustrate how you would ensure compliance with the Asset Manager Code. Finally, consider potential challenges the firm may face in implementing risk management practices and how you would recommend overcoming these challenges.