As your portfolio grows, having a professional manage it is a key part of both protecting it and nurturing it. But which type of management do you need: asset management or private wealth management? To help you decide, here are a few important things to know.
What Is Asset Management?
As its name suggests, this type of management is focused on the assets in your portfolio. It looks at your investments and assesses the level of risk compared to your personal situation, designs and rebalances the investments on a regular basis, monitors their progress, and analyzes tax impacts. You may also be able to get management of a specific asset, such as a real estate investor who hires a real estate asset manager.
What Is Wealth Management?
Wealth managers take a more holistic approach to managing your funds. While your investment portfolio is certainly a big part of the equation, they also look beyond it at how leveraged you are, whether you're properly insured, how you are doing toward financial goals, and what estate planning issues you may have. They may also help liaison with other specialists.
Who Needs an Asset Manager?
Because an asset manager's focus is narrower, they provide targeted help for someone who has a good grip on their overall finances and other outside advisors. Is your portfolio underperforming? Then an asset manager can help get it back in line. Do you find investments and taxation too confusing? Then an asset manager can help take the burden off these particular areas.
Who Needs a Wealth Manager?
Wealth managers are an excellent choice for someone who has accumulated or received significant private assets but doesn't really know what to do beyond savings.
If you want to branch out into new ventures but aren't sure how to reach that goal, a whole-body approach helps you make a plan that includes everything from income to assets to debts. Or are you expecting a major life change — such as retirement, marriage, or divorce — that affects every aspect of your personal and financial life? Then you need help looking at it from all the angles.
Where to Start
Still not sure which type of financial advisor you should rely on? Start by learning more about the strengths of each field. Consult with professionals in both areas of financial management to see how they could answer your questions and help you reach the goals you currently have. No matter which area of expertise you need, a trained financial advisor will undoubtedly help you grow your nest egg and secure your future.