Asset Management vs Wealth Management
People tend to confuse between asset management and wealth management due to the appearing similarity in the two terms, asset and wealth, and use them interchangeably, but there is a difference between asset management and wealth management. Both, wealth management and asset management are terms that are used when describing the process of managing financial resources and growing investments. The main aim of both wealth management and asset management is to grow wealth, increase investment income and improve profitability from investments. Wealth management and asset management are similar to one another with a few differences. The following article takes a closer look at both terms and highlights the similarity and the difference between asset management and wealth management.
What is Asset Management?
Asset management refers to the services offered by banks and financial institutions in managing the assets of investors. Assets managed include stocks, bonds, real estate, etc. Asset management is quite expensive and is usually carried out by high net worth individuals, corporations, governments and other entities that possess a large portfolio of assets. Asset management services include ascertaining the value, financial health, growth potential and various investment opportunities of assets. Functions of asset managers include analyzing past as well as current data, risk analysis, projection creation, strategy creation for asset management and identify assets with the highest possible returns. Institutional asset management refers to a special set of asset management and advisory services that are offered specifically to large institutional investors.
What is Wealth Management?
Wealth management is a broader financial management concept which includes asset management, investment and portfolio management, real estate planning, tax planning, investment advisory services, financial planning, etc. Wealth management definition is as follows: a professional service which includes investment advice, tax and accounting services and estate planning for a provision of a fee. Wealth management refers to the management or any financial activity that involves the generation of or management of income and wealth. Wealth management services are important to high net worth individuals, corporations, small businesses, etc. that require assistance in financial management. Since wealth management is quite broad what constitutes wealth management is different from one customer to another. While an individual may require wealth management services to balance a chequebook or structuring of trusts, estate planning, etc. wealth management for a corporation can include services such as tax planning, investment advisory, etc. High net worth wealth management are specialized wealth management services for individuals with large investment portfolios and high net worth assets.
What is the difference between asset management and wealth management?
Wealth management and asset management are both services that are closely related to one another. Both wealth management and asset management come under the umbrella of private banking services. Wealth management and asset management are both financial services that are aimed at growing wealth, increasing investment income, increasing profitability and maximizing returns. Wealth management is quite broader in perspective and includes asset management services, investment management, real estate planning, tax planning, etc. Asset management, on the other hand, is related to the management of assets and investments such as stocks, bonds, real estate and other assets.
Summary:
Asset Management vs Wealth Management
• Wealth management and asset management are terms that are used when describing the process of managing financial resources and growing investments.
• The main aim of both wealth management and asset management is to grow wealth, increase investment income and improve profitability from investments.
• Asset management refers to the services offered by banks and financial institutions in managing the assets of investors.
• Functions of asset managers include analyzing past as well as current data, risk analysis, projection creation, strategy creation for asset management and identify assets with the highest possible returns.
• Wealth management is a broader financial management concept which includes asset management, investment and portfolio management, real estate planning, tax planning, investment advisory services, financial planning, etc.
• Asset management, on the other hand, is related to the management of assets and investments such as stocks, bonds, real estate, and other assets.
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