The Differences Between Asset Management and Wealth Management You Should Know

The idea of investments, stocks, bonds, and assets can be daunting. To begin with, a lot of people are not able to tell the difference between asset management and wealth management. Aside from that, the essence and role of brokers, financial advisors, asset/fund managers, and wealth managers are often interchanged.

Before you wonder where you can invest in the Philippines, you must first learn the difference between asset and wealth management to ensure that you are making the right financial decision. Read through to give light on some uncertainties regarding the type of planning and management you need to have a better future.

What is Asset Management?

Asset management refers to the management of assets that could involve investments in equity funds, bond funds, fixed income funds, real estate, or stocks. Commonly, trusted asset management companies are the ones concerned with maximizing a client’s assets in order to generate their wealth.

A trusted asset management company can help you choose investments that are best suited to your financial situation aligned with your goals. This also means they will provide you with support in allocating your assets and recommending strategies on how to divide your investable money among different funds.

Finally, fund managers help investors like you in determining whether to increase the percentage of stocks in your portfolio and decrease the fixed income products like bonds, or vice versa, to yield better income.

What is Wealth Management?

Wealth management, on the other hand, focuses on an individual’s or the overall financial situation of a family to gauge the next steps in maximizing wealth. Typically, wealth management encompasses several services – tax planning, education planning, legacy and estate planning, insurance, and retirement planning.

This refers to the management of all financial aspects of clients with wider focus including the actual management of assets and financial planning. To put it simply, wealth management takes a holistic view of the client’s finances ensuring the protection and growth of their wealth.

Comparison Between Asset Management and Wealth Management

In this section of the article, we will discover the main differences between asset and wealth management by looking at 2 factors – functions and focus.

Functions

Wealth management includes the overall management of assets and investment portfolio, tax planning, education and estate planning, insurance, and retirement planning.

Asset management includes the management of major investments and investable assets through the analysis of past and current data, risk calculations, projections, formulation of strategies for asset allocation, and identification of suitable fund investments for investors.

Focus

Wealth management is focused on improving your overall financial situation, making sure that you have enough savings for retirement, you can send your children to school, and that you are well equipped once the time for estate purchase has come. It is more focused on how you can manage your wealth well.

Asset management has a narrower focus and is a subset of wealth management. Asset management companies look at your risk tolerance, study the market and how particular investments can help you build your investment portfolio. It is often for those who are looking into earning money for retirement.

Factors to Consider When Choosing the Right Path for You

Deciding whether you need asset management over wealth management and vice versa highly depends on your goals and the services you require. Here are some questions you can ask yourself to assess whether you need a wealth or an asset manager.

• Do you need comprehensive financial advice?

If you want a holistic view of your finances to better distribute them among services, then comprehensive advice is what you might need from a wealth manager. They will be able to assess your options and provide you with assistance in putting your money into services that can generate wealth growth.

• Do you need help in managing your investments?

While wealth management looks at investing also, nothing beats getting some advice from skilled and seasoned asset managers. With a team of fund managers and investment specialists, you can grow your investable assets and create portfolios that generate return.

• Do you want to start building a portfolio for your retirement?

When it comes to this question, you must also ask yourself if you are ready to build an investment portfolio for your retirement or is there a need to simply just have an overview of how life can be better after retirement.

These simple questions should determine your need for either of the two ways to manage your riches. Regardless, they both allow you to be better at managing your money.

Choose the benefits of asset management today with Cocolife Asset Management!

Many often use the terms wealth management and asset management interchangeably, but there are significant differences between them. While they both have the same goal of managing and growing your resources, wealth management is beyond just an individual’s investment. Learning the key difference between the two should help you decide what you need to improve your financial status and help you make better financial decisions.