Trending September 2023 # Asset Management Vs Wealth Management # Suggested October 2023 # Top 18 Popular

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Difference Between Asset Management vs Wealth Management

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Asset Management vs Wealth Management Infographics

Below is the top 7 difference between Asset Management vs Wealth Management:

Key Differences Asset Management vs Wealth Management

Asset managers manage an individual’s/institution’s investments like stocks, fixed income securities, real estate, and other assets. In contrast, wealth managers manage all the financial aspects of an individual/institution, including asset management, tax planning, education, legacy, and estate planning, cash flow planning, insurance, charitable contributions, retirement planning, etc.

Asset managers aim to maximize returns from clients’ investments. In contrast, wealth managers aim to balance all possible uses of clients’ money to preserve and maximize wealth over the long run through financial and investment strategies, accounting and tax approaches, and legal and estate planning.

The Asset managers mostly offer in-house products and are narrower and more sophisticated in their approach since they are primarily investment experts and closer to the market. Wealth managers are mo.

Re process-driven and seek synergy gains through coordination of inputs from financial experts, client’s attorney, accountant, insurance agent, and others.

Asset management compensation has been traditionally commission-based, although firms are increasingly shifting to a fee-based model for assets under management. Wealth management compensation has traditionally been retainer fee-based and a fee for assets under management.

Asset Management vs Wealth Management – Comparison Table

Let’s have a look at the Comparison between Asset Management vs Wealth Management:

Criteria

Wealth Management

Asset Management

Meaning Refers to the management of all financial aspects of the client. Refers to the management of assets of a client.

Focus A wider focus includes asset management and financial planning. Narrower focus, a subset of wealth management.

Functions Include management of investments/assets and portfolios, tax planning, education planning, legacy planning, estate planning, insurance, charitable contribution, and retirement planning. Include management of investments/assets- analyzing past and current data, risk-return analysis, projection, strategy formulation for asset management, and identification of “suitable” assets.

Registration Usually registered as broker-dealers.

Responsibility “Fiduciary” responsibility to put client interest before self. Required to offer products “suitable” for the client.

Management approach A process is driven approach involving coordination of inputs from financial experts, lawyers, accountants, insurance agents and other specializations required for financial management. More sophisticated and creative approach since asset managers mostly offers in-house products through their own financial expertise and direct involvement in a market.

Compensation terms Retainer fee-based along with a fee for an asset under management that favors impartiality in recommendations. Usually, commission-based for product sales may give rise to a conflict of interest.

Conclusion

Wealth management is a more comprehensive financial management service providing assistance in tackling all the financial aspects of the client. It includes asset management, financial, tax, retirement, and estate planning. An investor seeking such an all-inclusive service may be more inclined to have a steady relationship with a wealth management firm rather than relying only on asset managers. Some wealth managers provide banking services and guidance on philanthropic activities as well.

If you need help with only your investments, you would need the services of an asset manager, while if you want somebody to help you with your long-term financial planning aspects apart from asset management, you would need a wealth manager.