Managing your money with long-term goals in mind is important, but it can be tough to do on your own. A financial professional can help you though, with two major services being asset management and wealth management. While there are a handful of similarities between these offerings, they actually differ in what their main purposes and goals are. Wealth management is a comprehensive service that can involve everything from your estate, college savings, retirement, investments and more. On the other hand, asset management is more centrally focused around your investment portfolio. If you want help finding a financial advisor who serves your area, consider using SmartAsset’s free matching tool.
What Is Asset Management?
Asset management is just what it sounds like: the management of your assets. Assets are all of your financial holdings, but asset management tends to focus on your investments. This includes stocks, bonds, mutual funds, ETFs and other investments you make to try to grow your wealth and prepare for the future.
An asset manager will determine which investments are the best-suited to your financial situation. This means they’ll help you with things like asset allocation, or choosing how to divide your investable assets among different asset classes. Namely, this entails determining what percentage of your portfolio should be growth products, like stocks, and what percentage should be fixed-income products, like bonds.
Asset managers generally earn money based on a percentage of assets under management. Rates will often be progressive and decrease the more money an asset manager oversees for an investor.
What Is Wealth Management?
While asset management focuses on investments, wealth management takes a much broader view. Wealth management is about looking at an individual or family’s overall financial situation and taking steps to maximize their wealth and protect it down the line.
This can take a number of forms and encompass a number of services. Services offered by a wealth manager may include:
- Tax planning
- Education planning
- Legacy planning
- Estate planning
- Insurance
- Charitable giving
- Retirement planning
While asset management focuses on growing an investor’s money, wealth management looks more holistically at a client’s overall financial situation. It then takes steps to ensure their wealth has protection over the long term.
Wealth managers are also often paid through a percentage of assets under management, though some are paid a flat or hourly fee. Every advisor uses their own fee structure and rates, though.
Asset Management vs. Wealth Management: Which Is Right for You?
Deciding whether you need asset management or wealth management services ultimately depends on what your goals are. If you only want help with investing, an asset manager is likely the right choice. An asset manager will help you find the best investment options for your portfolio and leave all of the other parts of your finances more or less to you.
On the flip side, if you want someone to help you set up and manage your finances more holistically, you’ll want a wealth manager. Wealth managers can help with everything from education planning to estate planningand more.
There’s a good chance, however, that you may need both types of services, and many financial advisor firms offer both wealth management and asset management. However, you may have to pay separate fees for both services. At other firms, you may pay a wrap fee that covers both services, as well as custodial and other fees.
How to Find Wealth Management and Asset Management Services
There are a number of ways to find a wealth manager or an asset manager. The time-tested way is to get advice from a family member or friend who has a professional they use. This type of endorsem*nt certainly has its merits, as it allows you to get a recommendation from someone you trust. However, just because an advisor is a good option for one person doesn’t mean they’ll be the best choice for you too.
For instance, a lot of people inherit an advisor from their parents, but this might not be the manager best suited to their situation. Your parents are naturally at a very different stage of their lives from you. Look for a financial advisor who specializes in serving clients with financial situations comparable to yours.
SmartAsset also has a free financial advisor matching tool that can pair you with up to three advisors who serve your area.
Bottom Line
The decision between asset management and wealth management comes down to what you want out of a relationship with a financial professional. Asset management is about choosing and managing investments. Wealth management looks more broadly at a person’s overall financial life and portfolio. Some professionals do both, allowing you to hire just one person for the job.Collectively, the types of professionals you’re likely to hire fall under the broad category of “financial advisors.”
Financial Advisor Tips
- A financial advisor can help you with many different things, including financial planning, investing, estate planning, tax planning and more. Finding a qualified financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
- Before you start working with a financial advisor, be sure you know what kinds of fees you’ll be paying. Talk to your advisor about how their structure their fees and how much you can expect to pay.
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FAQs
While asset management focuses on investments, wealth management takes a much broader view. Wealth management is about looking at an individual or family's overall financial situation and taking steps to maximize their wealth and protect it down the line.
What is the difference between asset management and wealth management? ›
Asset managers primarily work on growing their clients' assets to maximize returns. Wealth managers have a broader focus and offer a range of financial services and advice aimed at helping high-net-worth individuals (HNWIs) manage their wealth and achieve their long-term financial goals.
What pays more wealth management or asset management? ›
It is generally understood that Asset Managers and Wealth Managers earn more or less the same amount of money: in any given bank, an Asset Manager will charge the same amount as their counterparts in Wealth Management.
What is the difference between Goldman Sachs asset management and wealth management? ›
Wealth management and investments are two distinct areas within Goldman Sachs Asset Management (GSAM). Wealth management involves helping high-net-worth individuals and families manage their assets, while investments involve investing money on behalf of clients.
What is the basic difference between financial management and wealth management? ›
Key Takeaways
Financial planners primarily assist people with lifestyle planning. Wealth managers primarily offer services for high-net-worth individuals and ultra-high-net-worth individuals.
What is the difference between asset and wealth? ›
What is the difference between wealth and assets? Wealth is your overall financial picture that includes all your assets. An asset can be considered anything of value that can be converted into cash—it includes things like cash itself, real estate holdings, investments, and personal property.
What is an example of asset management? ›
Managing the estate of someone with wealth is an example of asset management. Having a certain number of investments and property is a full-time job to oversee, so an asset manager is hired to do so.
How much net worth do you need for wealth management? ›
Any minimums in terms of investable assets, net worth or other metrics will be set by individual wealth managers and their firms. That said, a minimum of $2 million to $5 million in assets is the range where it makes sense to consider the services of a wealth management firm.
How much money do you need to go to a wealth management? ›
There isn't a hard-and-fast rule for how much money you “need” to get started with wealth management, but generally speaking, this is most beneficial for people with a net worth of $250,000 or more. It's also strongly recommended for business owners.
Can you make a lot of money in asset management? ›
As a post-MBA Analyst at a large mutual fund, total compensation might be on par with what post-MBA IB Associates earn: around $250K to $350K. At the Portfolio Manager level, earning potential is around $1.0 – $1.5 million per year.
For instance, Goldman Sachs' private wealth management division requires at least $10 million in investable assets. Its personal finance management services, meanwhile, feature a substantially lower initial investment—just $500,000 will get you in the door.
How do asset managers make money? ›
The standard fee for asset managers is 1% of whatever is being invested. Some asset management funds also make money through a performance fee, similar to a bonus. Performance fees are setup so asset managers are rewarded with a bonus payout when growing the fund to a certain target threshold.
What does an asset manager do? ›
Asset managers manage and monitor a company's assets. This could include property, money, stocks, shares and bonds, commodities, equities and other financial products. As an asset manager, you'd aim to maximise your employer's return on investment.
Is wealth management part of asset management? ›
Wealth management is a comprehensive service that can involve everything from your estate, college savings, retirement, investments and more. On the other hand, asset management is more centrally focused around your investment portfolio.
At what net worth should I get a financial advisor? ›
Generally, having between $50,000 and $500,000 of liquid assets to invest can be a good point to start looking at hiring a financial advisor. Some advisors have minimum asset thresholds. This could be a relatively low figure, like $25,000, but it could $500,000, $1 million or even more.
What is considered high net worth? ›
Key takeaways. A high-net-worth individual is typically defined as someone who has liquid assets of between $1 million and $5 million, although there's no firm definition of the amount as some institutions may define the range differently.
How much does JP Morgan charge for wealth management? ›
How Much Does J.P. Morgan Personal Advisors Charge? J.P. Morgan Personal Advisors charges between 0.40% and 0.60% of your assets under management annually. It's 0.60% for portfolios below $250,000, 0.50% for portfolios between $250,000 to $1 million, and 0.40% for portfolios over $1 million.
How does an asset manager make money? ›
The standard fee for asset managers is 1% of whatever is being invested. Some asset management funds also make money through a performance fee, similar to a bonus. Performance fees are setup so asset managers are rewarded with a bonus payout when growing the fund to a certain target threshold.
What is wealth management in simple terms? ›
Wealth management is the process of making decisions about your assets, sometimes with a wealth manager. This includes, but isn't limited to, financial investments, tax planning, estate planning and other financial matters.
What is the difference between asset management and investment management? ›
Asset management typically focuses on high-net-worth individuals and institutions, emphasizing long-term growth and risk management. Investment management caters to a broader range of clients, aiming to maximize returns often with higher-risk strategies.
