Joseph Sachetta
If I were to ask you to define asset management vs. wealth management, the question might give you flashbacks to some particularly difficult SAT comprehension questions. They might sound like two terms that mean the same thing, but asset management and wealth management are actually distinct services. Typically, an asset manager has a narrower field of specialization than a wealth manager, though there’s also a lot of overlap in what they do.
Time for another SAT question: Would you benefit from working with an asset manager, a wealth manager, both, or neither? Fortunately, there are no wrong answers here. The most important thing is to work with people who will help you meet your financial goals.
The Basics of Asset Management
Just as the name suggests, asset management involves managing. Typically asset managers focus on their clients’ investment assets. An asset manager manages a client’s portfolio and makes recommendations about investment opportunities to pursue and avoid. They generally rely heavily on intensive, up-to-the-minute research to analyze the market and make suggestions that are tailored to each client’s portfolio and risk tolerance.
Essentially, when you hire an asset manager, you’re hiring someone who lives and breathes investments to help you make the best decisions around your portfolio. Working with an asset manager you trust allows you to have as much or as little input into your investments as you want.
The Basics of Wealth Management
Wealth management is a broader category than asset management. When we talk about wealth management, we’re usually talking about full-service financial advice. Asset managers primarily focus on helping clients grow their money. Wealth managers help clients protect what they already have and maximize their wealth for the future.
Generally a wealth manager will be able to help a client with a wide range of financial topics affecting their entire family. Say you want to determine how much you can afford to spend on a child’s wedding, or develop a tax-advantaged charitable giving strategy—your wealth manager can help. They can also do things like help you maximize your retirement savings, minimize your tax burden and help you establish estate planning tools like trusts that let you preserve generational wealth.
Like asset managers, wealth managers can also provide investment advice. They’re often able to act as brokers and help their clients establish new investments. Your wealth manager can help you develop an investment strategy and manage your portfolio in keeping with your risk tolerance.
Ultimately, a wealth manager’s role is to help their clients meet their financial goals—whatever they may be. There’s no one-size-fits-all approach here. If you hire a wealth manager, your specific goals will determine what services you need.
A wealth management firm’s services may include:
- Tax planning
- Retirement planning
- Planning for educational costs
- Estate planning
- Trust management
- Investment advisement
Asset Management vs. Wealth Management: What You Need
Even when they understand the differences between the two, people are sometimes torn over the issue of asset management vs. wealth management. They know that they need the input of an experienced financial advisor, but aren’t sure where to turn.
Our philosophy is that the two go best hand-in-hand. Both asset management and wealth management impact your long-term financial future, and we want to look at the full picture when helping clients form their plans. Working with an advisor who is only looking at part of the picture means opportunities or risks may be missed.
Ultimately, developing a relationship with advisers you trust allows you to shape a financial future that aligns with your goals for yourself, your business and your family. At Sachetta Callahan, our goal is always to meet you where you are and devise the financial strategies that help you get where you want to go. I’m happy to answer any questions you have about asset and wealth management. Contact me today.
Joseph Sachetta, CFP®, CPA/PFS, MBA, MST has worked in finance and accounting for over 40 years. He is a Certified Financial Planner, and a Certified Public Accountant. Joe’s passion lies with helping his clients strike a balance between living for today and saving for tomorrow.