Differences Between Assets Management vs. Wealth Management

It is easy to mistake assets and wealth management to mean the same thing, but the difference comes in the management process elements. Assets management, in simple terms, is the management of investments or commodities like stocks, shares, real estate, etc. The goal is to manage them to increase profit and returns. On the other hand, wealth management is the managing of the general finances of an individual so that it can pay for in the long run. 

For example, you are to manage a clients’ financial life. When you give the client advice on things to do with money, you are seen as his wealth manager. So, suppose he has a specific amount and wishes to know what to keep aside for education, children, family, and much more. The process of advising the client on all these is wealth management. 

But, when you start handling the commodities of your client like the shares they have in a bank, you become the asset manager. You get to work out processes and strategies on how to help your client maximize returns. 

It is safe to say that wealth management covers the client’s entire financial life, while assets management focuses on a specific aspect.

In wealth management, you are striving to ensure that your client never falls into a financial crisis. Also, you work to ensure that your client is a law-abiding citizen who pays tax and follows all the laws that guide finances.

So, it is not out of place when people say that wealth managers have more tasks than assets managers. But, also, a school of thought says that assets management is a sub-group of wealth management, and we agree with them.

To better understand wealth and assets management, we will provide a table highlighting certain aspects of financial management and its handy areas.

Check Out The Table Below:

Areas	Assets Management	Wealth Management
Registrations	Assets Managers are usually registered as broker-dealer.	Wealth Managers are usually registered as investment advisors.
Commodities	Crypto, stocks, shares, fixed income securities, etc.	Cash flow, tax planning, education, etc.
Capital	Assets management needs intensive capital.	Wealth can be managed with any amount.
Focus	Assets management is narrower as it is a sub of wealth management.	Wealth management has a wilder focus.

Now that one understands assets and wealth management let us look at your skills to qualify as an asset or wealth manager.

Skills Needed By An Assets Manager

Analytical Skills: To qualify as an asset manager, you will need to have strong analytical skills because you will be dealing with a lot of research. Recall that assets managed are usually registered as broker-dealers. So, you will need to do a lot of research and get information about brokers and trading. It helps you understand the investments like stocks and shares and gives your client the best advice. The goal is to increase your client’s portfolio, so you need to know how to analyze the information you get and use it to the advantage of your client. It is one of the biggest hacks to becoming an asset manager.

Project Management Skills: As an asset manager, treating each client as a project will come in handy. And, you know that you need to deliver excellently on different projects. Now, do you have what it takes to handle different projects simultaneously? That is where your project management skill comes to play. No asset manager wants to have only one client. Since you aim for as many clients as possible, you need to have incredible project management skills. The goal is to ensure that your projects are delivered above par, as it would not make sense for your client to have a stagnant portfolio. If this happens, you can be sure that the client will look for a new assets manager.

Negotiation Skills: Allow us to tell you that you may meet stubborn clients as an asset manager, and you need the right skills to ensure that you build a healthy work relationship with them. Some clients are strongly opinionated, and it will have you wondering why they needed an asset manager. But, this is where your negotiation skills should come to play. Once you present your cards on the table, you should be convinced to ensure that your client buys the idea. And a way of doing this is by ensuring that you always present facts and there are no loopholes.

Critical Thinking: If you ever thought that being an asset manager is an easy task, you thought wrong. As an asset manager, you need to have critical thinking skills as it always comes to play in finance. You will always need to think things through, and it will be a bad idea to make a hasty decision. However, sometimes, you may be stuck in a tight position and need to develop a solution. In such a case, it is your critical thinking skill that will help you. It is also what sets asset managers apart and keeps you one of the best in your industry.

Risk Evaluation Skills: Some people say that investing in anything is a risk, and we agree with them. It is also why people get asset managers as they need you to evaluate the possible risks behind may encounter and solutions to overcome these risks. For example, suppose your client wants to buy shares from a company. It is your job as an asset manager to do due diligence on that company, analyze possible risks that may come up, have proper documentation of everything and come up with solutions. Typically, you will need to carry out a SWOT analysis and much more. SWOT here stands for strengths, weaknesses, opportunities, and threats. 

Skills Needed By A Wealth Manager

Some of the skills a wealth manager will have are:

Financial Interest: How can you classify as a wealth manager if you are interested in the financial sector? It is one thing to learn for the sake of the job, while it is another thing to be interested in finance. You will flow better when you are interested in the financial sector, and you will deliver better. In addition, having a genuine interest in the financial sector will give you a sense of satisfaction while you help your client.

Communication Skills: You are wrong if you think you can be an incredible wealth manager without excellent communication skills. After all, you will always have to communicate with your client, and how you sell ideas will determine how smoothly your workflow will go. As an excellent communicator, you need to break down the financial terms into easier terms for your client. The goal is to ensure that your client understands everything happening as it will build trust. In addition, you do not want a case where you leave your client confused after every session as it only increases doubt, and it may drive the client away.

Analytical Skills: A wealth manager is in charge of the financial life of their client. So, having great analytical skills will also come in handy. For example, how do you interpret any information you get during research? Your analytical skills will help you understand whatever information you are receiving and help you relay it to the client. Many things may not seem logical at first sight, but you will come to terms with them later with analytical skills. The thing with wealth management is that you will always have to deal with data, so you need analytical skills to understand everything, or you will flop at the job, and you do not want such to happen.

Trustworthiness: A wealth manager has to be an upright individual as it builds trust and leads to referrals. If your client ever feel like they cannot trust you anymore, they will look for another wealth manager. A goal to being trustworthy is to ensure that you are transparent with your client. It is best that you always carry them along in whatever you were doing. After all, it is their finances, and they have a right to know everything details about what you are doing. Also, you need to understand the concept of confidentiality as it would be wrong to ensure details about your client with outsiders.

Proactiveness:  You need to always keep up with trends as a wealth manager, as that is the only way to be proactive. You always need to check trends and come up with beneficial strategies for your client. Else, they will engage in activities that will send their finances down the drain, and that will put a dent in your name as a wealth manager. 

FAQs

Here are some of the frequently asked questions about the differences between assets management and wealth management.

Conclusion 

There is a difference between assets and wealth management. But, you can say that assets management is a sub-set of wealth management. 

So, to get your investments sorted, get an asset manager. Also, you need a wealth manager to organize everything about your money. 

References:

1. https://en.wikipedia.org/wiki/Asset_management
2. https://en.wikipedia.org/wiki/Wealth_management
3. https://smartasset.com/financial-advisor/asset-management-vs-wealth-management

Last Updated on February 8, 2022 by