Asset Management vs. Wealth Management – Which is Right for you?

Earning money requires a lot of efforts, hard work, and dedication, but when it comes to spending it, it won’t take much. Thus, managing our finances is vital in ensuring that we have financial stability long into our future. However, it seems like a daunting challenge to manage money better without the help of financial experts who are proficient in such matters and provide assistance such as asset management and wealth management that can ensure effective money management.

Asset management and wealth management are very popular terms that are in trend for some quite some time. Both may seem similar but there are key differences. To help in the shed some light on similarities and dissimilarities between asset and wealth management, let’s discuss both services individually before finding which is right for you:

Asset Management

As the name depicts, ‘Asset Management’ is the management of owned assets relate to all of your financial holdings, typically focuses on your investments in stocks, bonds, mutual funds, ETFs, and any other asset that hold or could gain value in future.

An asset manager is one who manages your assets and allocates to ensure they fall in line with your investment goals. They are also the one who manages the portfolio and decide what percentage of it should go to stocks, mutual funds, and what should be in fixed-income products like bonds. For all of this, they typically charge some money based on the percentage of assets.

Wealth Management

Wealth management is a somewhat broader term that often used by wealthy individuals and businesses. Wealth management services are typical to aid a client or company’s financial situation overall, while also consolidating long-term growth.

The professionals who provide such services are often called by a financial advisor, wealth manager or sometimes, a financial consultant. A wealth manager is behind constructing long-term strategies based on financial goals, existing circumstances, and aversion of risk to create a comprehensive plan of action.

Key Differences: Asset & Wealth Management

The most significant difference between asset and wealth management is the level of work in both departments. Asset management is in intent to take care of an individual’s investments however wealth management takes a broader look at overall financial circumstances in order to manage money to achieve long-term financial goals.

Asset management focuses largely on an individual’s investment returns meanwhile wealth management is more about preserving. It means, asset management is about asset allocation, emerging investment opportunities, risk-return analysis, and portfolio strategy in order to strategically invest into individual’s money to make the best possible returns. Whereas, wealth management tales a comprehensive approach to an individual’s financial situation.

Which is Right for you?

There’s no one-size-fits-all solution to this query. Of course, it is important to decide which services suit your financial goals. But, before you decide whether it is going to be asset management or wealth management, take a moment to ask yourself whether you fully understand the differences between them. Once you’ve finally understood, examine your situation well.

If your goal is to strategically plan your investments to make better returns in future then asset management is what you should go for. But, if your goal is to safeguard your already built wealth then wealth management services would give you a comprehensive solution.

Nevertheless, the decision is yours. Choose wisely!