Money management is an essential service for everyone, particularly those who earn and don’t have time to invest or who’re not experts in financial services. Poor control of money can lead to fewer returns for your hard work and reduced retirement plan. Everyone wants to be able to live comfortably and never have to worry about cash when they retire; this can only be achievable with a proper retirement plan. This article is aimed at helping you to understand the difference between asset management and wealth management as well as helping you make the right decision when you need the service of either one.
Asset management and wealth management are both popular choices in the financial field; they are, however, similar yet, perform different roles for your money. Asset managers deal with the management of investments/assets, projection strategy, formulation of asset management, and other asset management services. Asset management is like a subset of wealth management that only deals with asset management for the client. Wealth management is a broader field than asset management that incorporates all financial services which embody asset management and financial planning. Wealth managers mainly work to oversee a client’s wealth and look for ways to increase wealth and protect it.
What is the difference between an asset manager and a wealth manager?
- Based on their role, Wealth management mainly focuses on asset management and financial planning, while asset management is a much narrower field that focuses on asset management.
- Based on the functionality, wealth management entails management of portfolio, management of investment, tax planning, retirement planning, estate planning, and all other services in financial planning while asset management functions as asset managers who do risk-return analysis for businesses, identification of suitable assets, strategy formulation for assets, and other asset management services.
- Asset management aims at maximizing the clients’ returns on investments while wealth managers aim at balancing potential means of using the client’s money to preserve and maximize the wealth through any investment and financial strategies.
- Wealth managers are more method obsessed and seek corporation gains from the organisation from financial experts, insurance agents, and others, while asset managers are narrower and more refined in their approach since they have a closer interaction with the market.
- Wealth managers are registered as investment advisors, while asset managers are registered as broker-dealers.
- A wealth manager is responsible for putting the client’s interest before his/her own while an asset manager is responsible for suggesting suitable products to their clients.
- Most wealth managers are paid through retainer fees along with charges for the assets they manage, while asset managers usually work with payment based on commissions centralised around the sales of a product suggested to the client.
In conclusion, asset management is a subcategory of wealth management that majorly focuses on one key area, asset management, and all other services related to the area. Wealth management, on the other hand, is a broader field of comprehensive financial management that embodies asset management and all other financial services.
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