How do you decide if you need a financial advisor specializing in asset management or wealth management? After all, they sure do sound similar.
We’re here to help you stack up asset management vs. wealth management for a side-by-side comparison to see which best suits your needs.
With asset management, you hire someone to manage your investments. Wealth management includes asset management but also combines multiple aspects of your financial life — like estate planning, tax services and philanthropic giving into a consolidated and holistic plan.
Asset management focuses on using investments to increase your wealth over time.
Asset managers — also called investment advisors, investment managers or portfolio managers — can help you identify the best investment products and asset allocation to reach your goals based on your risk tolerance. From there, they manage client investment portfolios to keep them on track with each client’s goals.
Some common asset management services include:
Some asset managers may work as fiduciary financial advisors — an important distinction as only fiduciary advisors are legally required to put your interests first. Therefore, fiduciary advisors can’t recommend a product or service unless it is the best option for your unique circumstances, even if that product would be less beneficial to their bottom line.
Wealth management takes a more holistic view of your finances than asset management alone. Typically reserved for a firm’s more affluent clients, wealth management includes asset management but goes well beyond to service every aspect of your finances:
Wealth managers are almost always fiduciary financial advisors.
Firms tend to set a high bar to qualify for wealth management services, with AUM minimums often found in the $1 million to $5 million range. For this reason, you might start with asset management and financial planning until you qualify for (and need) a more comprehensive wealth management approach.
While these two services sound interchangeable, they’re not. Asset managers typically focus on using investments to help their clients build their wealth. Wealth managers take a broader view of their wealthy clients’ assets so that each part of a client’s net worth works in harmony.
Choosing between asset management and wealth management comes down to your assets, the type of service you want — focused or holistic — and which type of advisor can better meet your financial needs.
Weighing the benefits and capabilities of asset managers versus wealth managers is only the first step in your search for a trusted financial professional. Once you know what type of professional you’re looking for, it’s time to start wading through profiles until you find the right one.
To help you take the next step in your search, you can:
We will use this information to find the right advisor near you
The “Find a Financial Advisor” links contained in this article will direct you to webpages devoted to MagnifyMoney Advisor (“MMA”). After completing a brief questionnaire, you will be matched with certain financial advisers who participate in MMA’s referral program, which may or may not include the investment advisers discussed.