Understanding the difference between wealth management & asset management is essential for achieving your financial goals. Both forms of management help you meet this goal but use different approaches that you will need to understand.
Read on to learn more about these two concepts and how they influence your success in achieving your financial goals.
What is Wealth Management?
Wealth management uses a more holistic approach to helping the client get a return on their investment. A professional working from a wealth management approach will work with the client to find solutions that help maximize and protect their wealth.
Examples of some of the advice wealth managers provide include:
- Setting up college funds for children
- Estate structures and what changes may be necessary
- Which insurance products the client should buy
Wealth managers play an important role in financial planning, and their role intersects with asset management, which we will discuss shortly. Under a wealth manager, clients will be able to easily plan real estate and investment strategies, including tax-free options worth considering.
What is Asset Management When Considering the Difference Between Wealth & Asset Management?
Asset management usually refers to a client’s investments, which may include stocks, bonds, and similar products. This form of financial planning focuses on maximizing the return on your investment for your financial products. Asset management could focus on specific products rather than your wealth as a whole.
One of the things that asset management can accomplish for clients is allocating products in ways that fit their financial strategy preferences. Every client has different needs and goals for their wealth and assets, and professionals work hard to make sure their clients reach these goals.
What Do Clients Need to Think About the Most with Wealth or Asset Management?
One thing that wealth and asset clients benefit from knowing is that the financial markets have seen a lot of changes in recent years, including:
- Which tools do you need to track, buy and sell investments the most effectively
- New types of investment strategies are now on the market
- Changes to tax laws
- Increased market volatility
- Market change occurring at a faster pace
Many traditional wealth and asset management companies haven’t changed their approach to investing, despite these changes. Despite many professionals maintaining a “tried and true” approach, many financial clients are looking for something better. These clients prefer solutions that are more predictive.
Why Personal Approaches Work Best for Your Wealth
So many products and services used today are personalized. One thing in keeping with this trend is financial management. With each client having different needs, many prefer professionals who steer away from cookie-cutter approaches that fail to grasp the needs of today’s investors.
Risk tolerance still matters to investors, and professionals who manage these types of products will always keep this in mind. However, extra personalization in the form of tax strategy can also help provide the protection that clients need in uncertain environments. Market situations change so rapidly that clients benefit from being on top of them at all times.
Professionals putting together the best portfolios will use stocks that they know will give their clients an advantage. In addition to helping to select the best products, professionals who manage assets and wealth effectively know how to manage the strategies for every client. With every client having different needs, the strategy for each client needs to be tailored to their needs, as a strategy that works for one client may not work with everyone else.
What Should You Do If You Have Questions About Managing Wealth and Assets?
A decision about managing your wealth and assets is important. What is probably the most important thing to think about is whether you want to depend on the market’s ups and downs. If not, you will benefit from using a professional.
Prevail helps you work through everything that comes with understanding the difference between wealth management & asset management; contact us today for more information on how we can help you.