05 July 2021
Asset and investment management is a broad term that encompasses a range of strategies and approaches that all aim to protect and grow the assets of an individual or organisation. Sometimes the terms asset management and wealth management are used interchangeably, which can be misleading. There are, in fact, some key differences between the two approaches when it comes to stewarding and growing wealth.
Perhaps the essential difference between wealth and asset management is in their approach to a client’s money. While wealth management will take a broader, more holistic approach to a client’s overall financial situation for the long term, asset management will be more focused on growing that wealth.
What does this mean in practice?
Wealth management combines financial planning and investment strategy to manage and grow your wealth over the medium to long term. Wealth managers will take care of asset and investment management for a wide range of clients. They will oversee their client’s finances and may be directly involved in the management of different assets, their estate, cash flow and tax affairs.
Wealth managers will recommend and manage investments and help their clients meet their long-term goals, but their focus will be broader, with an eye towards stewarding the wealth that has already been built up. It could play a part in retirement or inheritance planning.
A wealth manager may put together a financial plan that supports their clients in achieving specific financial and lifestyle goals, taking account of a client's financial responsibilities. A wealth manager will usually be registered as an investment advisor.
In terms of responsibilities, wealth managers will have a fiduciary responsibility to put the client's interest before themselves. Wealth managers should take a responsible and long-term approach to wealth management for their clients.
Whereas wealth management will take a holistic approach to a client’s finances, asset management will focus principally on their investments. They will spot immediate opportunities as well as long-term trends that might have an impact on the wealth of their clients.
An asset manager will determine what investments to make or avoid to grow the overall value of their portfolio. They’ll most commonly invest in a range of products such as fixed income, real estate, mutual funds, alternative investments, commodities and equities.
Asset and investment management will take a rigorous approach to research, making use of both micro and macro analytical tools. Asset managers will usually be registered as broker-dealers, and they are required to offer products to clients that can be deemed ‘suitable’.
Whether you should opt for wealth management or asset management services and your own approach to asset and investment management will depend on your current priorities.
If you’re looking for a comprehensive approach to your finances that looks at your long-term goals, current priorities and can help you make financial plans for the future, then you should opt for wealth management services.
If, however, you’re looking for help with identifying suitable investments to grow your portfolio, then asset management is likely to be the most appropriate.
The experienced team at Global Investment Strategy offers a range of discretionary asset management services that meet the needs of both institutional and private clients. We provide a range of wealth management services, including execution-only trading and a variety of investment vehicles. Here at Global Investment Strategy, we tailor our services towards different risk profiles and help you achieve your financial goals.
Call +44 (0)20 7048 9440 or email info@gisukltd.com to find out more.
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