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A Guide to Asset Management vs. Wealth Management

By Robert Hanlon on January 13, 2021
Categories: INVESTING

Many people wonder about the difference between asset management and wealth management. They are both closely related and integral to helping investors achieve their financial goals.  However, there are subtle yet important distinctions between asset management vs. wealth management. Let’s learn more about both of these services to help you determine how each should fit into your financial plan when working with financial advisors.

What is asset management?

Asset management is the financial service and process of investing funds on behalf of others. Typically, asset managers have a specified mandate that will guide them in determining how to invest. Investment mandates can be very wide ranging or specific. For example, an asset manager or an asset management firm as a whole may have a broad objective to invest across global markets or a very focused mandate to invest only in US healthcare companies. Asset managers are primarily dedicated to growing an investment portfolio in accordance with their stated mandate. As such, asset managers play an important role in your financial plan in terms of investment strategy and money management. However, asset managers may not have a full understanding or appreciation of your complete financial picture and goals. This is where a wealth manager can step-in and provide a holistic service for individuals and their families.

What is wealth management?

Wealth management is an integrated, holistic service designed to help you reach your financial goals. As such, while asset management and wealth management overlap, the scope of wealth management services is significantly larger. For a detailed explanation of wealth management services, see our full post on the topic. In addition to asset management, wealth management should, at a minimum, include services such as financial planning, tax strategy and planning, insurance reviews, estate planning, and charitable gift planning. Each of these services is connected and impact one another. For example, your current and projected tax situation can have a meaningful impact on asset management decisions or the best way to conduct charitable giving. Put another way, wealth management directs asset management by taking into consideration your unique financial situation and goals.

Another key component of wealth management is that the services are tailored to your needs. Because no two individuals are the same and goals change over time, wealth management involves personalized solutions and continuous monitoring and engagement. For example, at Dowling and Yahnke, every client works with a dedicated team of advisors, financial planners and portfolio managers to guide and manage their wealth. Whether you need help with portfolio management, are seeking a financial planner to craft a personalized financial plan or an investment advisor to help with investment strategy, private wealth management may be for you.

What should I look for in a wealth manager?

As discussed above, wealth management involves a wide range of services. When looking for a wealth manager, it is important to seek a manager with a skillset and professional experiences wide enough to support this increased scope of service.  Whether you are seeking the services of an experienced financial planner, a trusted investment manager, or the guidance of a financial professional, at Dowling & Yahnke Wealth Advisors, an entire team of dedicated professionals work on behalf of every client. This collaborative team has earned a number of industry certifications that reinforce their level of knowledge and understanding.  Furthermore, your wealth manager should also work closely with your other trusted advisors, such as your tax professional and estate planning attorney to ensure every facet of your financial picture is aligned.

When should I seek wealth management services?

Likely, nearly everyone engages asset management services.  For example, if you invest in your company’s retirement plan, the funds you invest in are run by asset managers.  However, given the larger scope of work, wealth management services are typically appropriate for individuals with more complex estates, high net worth individuals,  or who are approaching a financial milestone (business sale, retirement, etc.). In those situations, an individual will likely benefit from the increased level of service and holistic approach provided by a wealth manager.

Bottom line

Working with a wealth manager may be appropriate if you are looking for a professional that can advise on more than just your investment portfolio.

Contact Dowling & Yahnke Wealth Advisors in San Diego to learn whether our wealth management services are right for you and your needs.

 

Please note that this material is presented for informational purposes only and should not be construed as individual legal, tax, or financial advice.  When considering estate planning strategies, the individual should always consult with the individual’s own legal, tax, and financial advisors.

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