Difference between Asset Management and Wealth Management

While it might not seem so, there’s a big difference between asset management and wealth management that can play a crucial role in your financial success. High-net-worth individuals with $5 million or more in liquid assets can read our extensive book on wealth management, asset management and taxes  to see how they help them in attaining financial success and security.

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STRATEGIES FOR FAMILIES WORTH $5 MILLION TO $500 MILLION

 

7 Secrets To High Net Worth Investment Management, Estate, Tax and Financial Planning

 

The insights you’ll discover from our published book will help you integrate a variety of wealth management tools with financial planning, providing guidance for your future security alongside complex financial strategies, so your human and financial capital will both flourish.

Clients frequently share with us how the knowledge gained from this book helped provide them tremendous clarity, shattering industry-pitched ideologies, while offering insight and direction in making such important financial decisions.

Most high-net-worth individuals, as well as ultra-high-net-worth families, have $5 million to $500 million in liquid assets. Moreover, most of their wealth is distributed across a variety of assets. They could have stocks, bonds, mutual funds, and even have their wealth invested in real estate. What all this means is that managing all these assets is not easy. With this kind of wealth, high-net-worth individuals not only have to devise the right growth strategy for different kinds of assets but also have to determine how they will protect all those assets in any unforeseen circumstances. This protection is one of the major reasons why you don’t just need asset management but wealth management as well. While it might not seem so, there’s a big difference between asset management and wealth management that can play a crucial role in your financial success. High-net-worth individuals with $5 million or more in liquid assets can read our extensive guide on financial advisors to see how they help them in attaining financial success and security.

Pillar Wealth Management is an expert and independent wealth management firm. We have an experienced and expert team of fiduciary and 100% fee-only financial advisors. Our wealth managers strictly work with affluent clients who have a net worth of at least $5 million to $500 million. We offer a range of investment, financial planning, financial advisory, and other wealth management services. These include investment and portfolio management, tax planning, risk management, estate planning, and more. Whether it’s asset management or wealth management, you can plan a free chat with our advisors today to discuss your financial needs.

In this blog, we’ll be discussing what asset management and wealth management are, the difference between the two, and whether wealth management is worth it. Let’s dive right in.

What is Asset and Wealth Management?

While they might sound similar, in reality, asset management and wealth management are quite different. Asset management is a kind of financial service offered by various financial institutions such as investment firms, private banks and even wealth management firms.

As the name suggests, asset management involves managing the assets of an individual or family or even a company by another group. However, it is not easy or simple as it sounds. Asset managers have to help their clients choose the right mix of assets that will help them reach their goals without taking on any unnecessary risk.

They have to consider the various internal as well as external risks that could potentially hurt the clients’ assets. They have to utilize a number of strategies to maintain efficient and effective asset management. They base these strategies on extensive research, study the market trends, and employ many analysis tools to make it happen.

Asset management can include all of a high-net-worth individual’s assets or just a specific category of it, such as real estate. Wealth management, on the other hand, is a little different. In fact, it is much more comprehensive. It focuses on all your wealth, including your assets, debts, costs and expenses, future plans, and much more.

It includes many financial services beyond just asset management. It considers short as well as your long-term goals and challenges. Read our handy guide on portfolio growth strategies to discover how this can help you attain financial success.

Keep reading to discover the difference between asset management and wealth management.

Difference Between Asset Management and Wealth Management

Difference Between Asset Management and Wealth Management

For wealthy people who are struggling with managing their considerable wealth and assets, wealth management and asset management can seem like the same thing. However, as mentioned earlier, they are different, and if you want your efforts to succeed, you need to choose the right service according to your needs. Here are some differences between asset management and wealth management.

Focus

For starters, asset management has quite a narrow focus. It is limited to the assets of a high-net-worth individual. Asset management firms are only focused on growing those assets and protecting them in case of any unforeseen circumstances.

Usually, after consulting with you, they might decide on a certain number or goal that they have to reach and will focus all their efforts on simply meeting that specific goal or reaching the number. Wealth management is different. It has a much broader focus.

It does involve the growing and protection of your assets, but it also includes much more than that. It connects your asset management strategy with other aspects of your wealth, such as your retirement goals, tax-saving strategies and estate and legacy plans.

Scope

Asset management also has a much more limited scope. Most of it is restricted to a person’s assets and those assets only. For those assets, the asset management firm will conduct extensive research and evaluate the market conditions and carry out the necessary research. But, again, it will strictly be for those assets only.

So, if you were wondering, does asset management pay well? For your assets, yes, asset management will help grow your assets, allowing you to reap high returns. However, it would be limited to your assets, and you might not notice a similar growth or payback in other areas of your wealth.

Comparatively, wealth management has a much larger scope. It includes other financial services such as retirement planning, financial planning, debt management, tax planning, and more. Start a free chat with us today to learn about all the services we offer.

Compensation

This depends on various factors, but many asset management firms tend to work on a commission-based payment model. For instance, brokers advise you regarding different products and assets. However, they also earn a commission on those products.

Every time you buy or sell an asset, they earn commission over it. Sometimes, this creates a conflict of interest. They might start recommending you those assets which earn them bigger commissions rather than those which best align with your needs.

Therefore, such firms or advisors don’t always make the best decisions for you. On the other hand, most wealth management firms, such as Pillar Wealth Management, work on a fee-only basis. This means they simply charge a fixed fee, usually 1%, on the total assets under management (AUM). The more they help you earn, the more they can earn themselves. So, their interests are perfectly aligned with yours.

Is it Worth Having a Wealth Manager?

When you are particularly struggling with money management or with growing your assets, it might seem like asset management is the answer. However, wealth management can prove to be more beneficial for you in the long run. Here’s why having a wealth manager is worth it.

Financial Planning

Unlike asset managers, wealth managers can help you with comprehensive financial planning. This goes beyond just planning strategies for your assets. Financial planning encompasses all of your wealth, debts, future plans, and many other things.

It helps you map out your entire wealth management journey and gives direction to your efforts. Without a proper plan, it can be quite difficult to accomplish all your goals. Read our book, The Art of Protecting Ultra-High-Net-Worth Portfolios and Estates – Strategies for Families Worth $25 million to $500 million, to find out how else you can attain financial success.

Services

Wealth managers also offer many more services than just asset management. They can help with retirement planning, estate planning, legacy planning, tax planning, investment management, debt management, cash flow planning, risk management, accounting, banking, and much more.

Besides the convenience of availing all these services under one roof, it also allows your wealth manager to handle your assets in a more holistic manner. They don’t just focus on growing your assets but also growing your overall wealth in a sustainable manner.

They take measures to protect your assets, control costs, minimize taxes, and much more. Read our brilliant guide on the best financial advisors to learn how such holistic services can save you from an uncertain retirement.

Fiduciary Services

Wealth managers are often fiduciary advisors. As fiduciaries, they are obligated to hold your best interests above their own. Even if a certain decision is risky for them but beneficial for you, they must offer the option to you anyway. Similarly, they always have to be completely honest and straightforward with you. They can’t have any conflicts of interest, and if they do, they must disclose it to you right away.

Dedicated Advisor

With a wealth manager, you can benefit from having a fully committed and dedicated advisor. They will be with you throughout your life and may even handle your wealth after you are gone. Any time you have any questions, you can immediately get in touch with them and discuss your concerns. You can connect with one of the expert advisors at Pillar Wealth Management today to discuss your financial concerns and get started on your wealth management.

Tailored Financial Plans

Instead of just focusing on your risk tolerance and your desired growth percentage, wealth managers focus on much more substantial factors. For instance, they focus on your short and long-term goals in life, your aspirations, your retirement goals, and so on.

They take into account your personal circumstances, such as your family structure, health, and any other factor that could affect your financial position. Then, based on all this information, they develop highly tailored financial plans that best suit your goals and help you meet your goals quickly and efficiently.You can find out why this matters from our comprehensive guide on portfolio performance.

Final Thoughts

Asset management is certainly vital for high-net-worth or ultra-high-net-worth individuals. It helps them divide their wealth into the right assets and then grow those assets in a sustainable way. However, that’s not enough to help them meet their goals and attain financial success.

That’s why they need wealth management, which is much more comprehensive and adopts a more holistic approach. It focuses on all aspects of your wealth so that you don’t have to worry about any market risks or risks you might be exposed to in the future. It lets you have complete financial serenity where you are not worried about anything.

This key difference between asset management and wealth management is what lies between financial success and an uncertain retirement. Therefore, you need to think about your needs and priorities carefully and then choose the most suitable advisor. Learn how to choose such a financial advisor from our excellent guide for individuals worth $10 million or more.

At Pillar Wealth Management, our financial advisors and wealth managers have been catering to the unique needs of wealthy clients with $5 million to $500 million in liquid assets for more than three decades now. We are familiar as well as experienced with the kind of financial predicaments such individuals face and, therefore, are always trying to develop the right strategies to help them overcome these challenges and attain financial prosperity. Our advisors generate highly personalized plans that best align with our clients’ needs. If you are struggling to manage your assets effectively and meet your goals, line up a no-obligation meeting with Pillar Wealth Management today.

Authors

To be 100% transparent, we published this page to help filter through the mass influx of prospects, who come to us through our website and referrals, to gain only a handful of the right types of new clients who wish to engage us.

We enjoy working with high net worth and ultra-high net worth investors and families who want what we call financial serenity – the feeling that comes when you know your finances and the lifestyle you desire have been secured for life, and that you don’t have to do any of the work to manage and maintain it because you hired a trusted advisor to take care of everything.

You see, our goal is to only accept 17 new clients this year. Clients who have from $5 million to $500 million in liquid investable assets to entrust us with on a 100% fee basis. No commissions and no products for sale.

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