Managing your long-term financial goals can take a lot of work. Many specialists and services are ready to help, including wealth management and asset management services.
While there are many similarities, these services also have different features, so it’s necessary to review them to understand which service is exemplary.
Asset management is concentrated more on the client’s investment portfolio, while wealth management includes college and retirement savings, investments, and estate.
Keep on reading to learn which service you should opt for.
The Basics of Wealth Management
Wealth management is a broad term. Such services comprise everything from estate planning, and investment options, to college and even retirement savings.
It helps to manage your personal or family finances and offers an in-depth analysis of your current monetary situation.
It aims to help the client maximize their savings and build wealth. You may encounter several forms of wealth management.
The services provided by such managers comprise:
- Education planning
- Tax planning
- Estate planning
- Legacy planning
- Retirement planning
- Charitable giving
As you can see, wealth management helps improve the client’s general monetary stability so that they don’t need to search for a 3000 loan bad credit by improving the financial situation to build wealth and savings.
After that, a wealth manager will ensure your savings and wealth are protected for the long term. How do you pay for these services?
The manager may charge an hourly or a flat fee. Sometimes, you pay a percentage of assets being under management.
The Basics of Asset Management
This is the management of your valuable assets. What can it be? Your assets may include financial holdings you want to keep safe and grow your investments.
Your investments may comprise mutual funds, bonds, stocks, and ETFs – everything that will help you build wealth for the future and reach your monetary targets.
If you turn to an asset management company, the specialist will define what type of investments will work best to help you increase your savings and make your money work for you.
If you require assistance selecting how you should divide your assets or their allocation, you may opt for an asset management firm.
The professionals will provide valuable insights into how you should organize your investments and what percentage of your portfolio should be used for fixed-income and growth products.
How do you pay for these services? The fees range among service providers, and these managers will take a percentage of your assets under their management.
The Difference between Wealth Management and Asset Management
The web platform of the US General Services Administration provides a list of government programs that boost the efficiency of real estate management.
Specific activities include supporting the Federal Real Property Council, helping federal agencies comply with Executive Order 13327, tracking progress on actual property performance, boosting the Federal Real Property Profile Management System, and gathering inventory information to support the President’s Management Agenda.
Here are the aspects that distinguish wealth management from asset management.
- Service Offering. Asset management companies aim to manage finances for their clients. Those with enough assets who want to invest wisely may turn to an asset manager for help. This specialist will choose the type of investment, open the necessary account, and place trades. The clients will be offered assistance evaluating risks and selecting mutual funds, bonds, ETFs, and stocks. Wealth management provides broader financial advice, including estate planning, retirement planning, insurance protection, stock options, liability issues, tax planning, and trust management.
- Fiduciary Status. Clients need to understand their type of relationship with a financial advisor. Remember that fiduciaries work in your interests, and wealth managers tend to serve fiduciaries. Some asset management companies offer such services, while others don’t.
- Compensation Model. Asset managers typically charge a fee or a commission based on the percentage of assets under management. At the same time, wealth managers generally charge fees on the percentage of support, but they can also charge hourly or flat fees. It’s necessary to understand how much you have to pay for such services and compare your options.
Which Services Are Right for You?
The asset management industry is too concentrated. It means that pooled funds and households don’t have many options and face fees charged by asset managers for their money management.
As we can see from the chart published in the Public Option for Asset Management in the United States article by Roosevelt Institute, the three largest asset managers are BlackRock, Vanguard, and State Street Global Advisors (SSGA).
These three giants have increased the percentage of ownership held between them when the percentage of corporate equity held by asset managers has also been boosted.
Speaking about these two management options, you must choose the one that best suits your needs. Do you just need assistance with investing? You can find appropriate investment opportunities for your portfolio if you turn to an asset manager.
Additional financial strategies and questions will remain your responsibility. Are you planning to get personal money management with a holistic approach?
Choose a wealth manager who will charge every financial aspect, from estate planning to retirement planning.
Sometimes, you may even need both specialists, depending on your needs. Some companies offer both financial management options to clients. Of course, you will still need to pay fees to each specialist separately.
It’s great that you may consult in person and decide which professional will most likely help you solve your issues.
The Bottom Line
It’s beneficial to have both wealth management and asset management service available to consumers today. What are your long-term financial needs?
If you want a thorough approach and assistance with your investment savings, you should turn to an asset manager.
Choose a wealth manager if you want a more holistic approach and a more comprehensive range of financial services.
You can’t always tell what a person does from their title. Check the service agreement, look through our tips, and ask additional questions to decide which specialist suits you.