What’s the Difference Between Wealth Management & Asset Management?
Posted by Ocean Wealth
Let’s be honest: money management isn’t always easy. There are still so many people out there that have worked hard their entire lives and don’t see the rewards from their lengthy careers. Their goals get buried under a pile of financial jargon that they can never fully navigate until it’s too late.
This is where having a good financial advisor comes into play. They’re experts who deal with money management on a daily basis and have more than likely seen a similar situation to yours on many occasions. Before seeking out a financial advisor, however, you should have a basic understanding of what they’re able to help you with.
Wealth management and asset management are the most common services that a financial advisor will help clients with. While they both fall under the same umbrella, there are distinct differences between the two. We’re here to help break down each service so you can decide what one suits you best.
In a nutshell, wealth management is about examining an individual or family’s overall financial situation and trying to maximize long-term wealth. It’s a more holistic approach to finances that can include everything from tax planning to retirement planning.
Wealth management considers all the financial aspects of a respective client. Financial advisors that specialize in wealth management can help clients with education planning, legacy planning, insurance, and even charitable giving. For example, if you’re trying to set up a fund for your child to go to university, a wealth management expert would be ideal to speak with.
The wealth management process can also include a number of different experts as well. Outside of a financial advisor, you can also bring accountants and lawyers in to consider all angles of a wealth management strategy. Since these kinds of strategies touch on multiple aspects such as estate planning, a lawyer may be brought in to ensure that the passing of wealth is being conducted in a legal manner.
Asset management is a subset and one aspect of wealth management. The goal of asset management is very specific with one overarching outcome — to manage all your assets. While assets refer to all your financial possessions, asset management has more of a focus on investments you’re making.
Helping manage investments such as stocks, bonds, mutual funds, and ETFs are all within the scope of someone managing your assets. They’ll analyze data, conduct a risk-return analysis, make projections, and identify suitable assets for you. Their goal is to work with you to make sure you’re making the best investments possible. They’ll also allocate your assets and determine what percentage of your portfolio should be growth investments versus fixed-income investments.
The approach also varies from a wealth management strategy. Asset managers use their own financial expertise and knowledge of the market to help clients, there’s rarely any outside input. In some ways, it’s a less complicated approach but also far less comprehensive than a wealth management strategy. Wealth management strategies look at your whole financial situation — that includes your assets.
Manage your wealth with confidence. Our trusted team of experienced advisors are here to help with all your financial planning needs. We’ll help you make the best money management decisions for your future. Contact us today!