When to Choose Investment Management Over Asset Management

investment management
November 27th, 2023 0 Comments

Financial advisors and strategists are not always a one-size-fits-all resource. Working with different types of clients and focusing on other areas of financial management, it can be confusing for an investor to determine the best investment management services provider for their unique needs. 

One important distinction that may come up in early conversations with a potential wealth management firm is investment management versus asset management.  

So, before you enlist an expert partner to help guide your financial future, consider the key differences between these two management services. This will help you determine which will better fit your short-term and long-term goals. 

What is Asset Management? 

Asset management entails managing a client’s entire portfolio, including stocks, bonds, real estate, and other unique investments, like artworks or other assets. The clients of asset managers tend to be very high net-worth individuals, businesses, or organizations who already have a lot of built-up wealth through their assets. They also have a somewhat detailed plan or idea of how that wealth can slowly but steadily accumulate over time.  

As a result, asset managers take these plans into account and tend to focus on risk management to keep existing assets covered. This may include spreading investments across different asset classes or making minor adjustments to keep a complete portfolio intact and safe from dramatic pitfalls. 

Because of this primary purpose of asset protection planning, asset managers work with foundations, endowments, and other institutions and typically charge a percentage of assets under management (AUM) as their continual fee.  

What is Investment Management? 

Investment management is certainly like asset management, but investment management entails a wider variety of clients, and a broader range of investment strategies. 

Investment managers are arguably best suited for individuals or organizations across all income levels who want to grow their wealth as much as possible but don’t necessarily have a concrete game plan on how to proceed.  

Instead of protecting existing assets, investment managers focus on maximizing returns over a given timeframe. For example, if a client wants to retire at age 60 with a specified amount of wealth accumulated by that time, the investment manager will conduct extensive research to determine the best way to reach this goal. Furthermore, the investment advisor will also make adjustments to an investment portfolio as needed in the future to fulfill these ambitions. 

On the surface, it may seem like investment management is riskier, and while higher-risk strategies may be in play, this is not necessarily the case. Keep in mind that investment management isn’t stand-alone advisement on which assets, like stocks and bonds, to accumulate now. Instead, it’s a lifelong partnership where the investment manager continually looks for opportunities, and the best ways to mitigate long-term risks for the outlined investment horizon.  

Just like investment strategies can vary by client, so can the fee structure of investment managers.  Investment managers are an excellent fit for individuals of all income levels and goals who want lifelong guidance on growing their assets and wealth.  

The differences between asset management and investment management are more than varying strategies or clients.  For example, different regulatory bodies oversee asset and investment management, with varying rules or regulations attributed to each. So, while the long-term goals may be similar – building wealth over time – the details of how wealth managers in varying arenas reach these goals are different. 

Investment Management or Asset Management – How to Decide? 

When determining whether an investment manager or asset manager is optimal, the best thing an investor can do is carefully consider their financial situation, goals, and expertise in financial growth. For example, an individual who represents a large endowment fund with several existing assets may want to turn to an asset manager to help streamline their future investment moves. 

An individual who has moderate wealth and wants to accumulate more in a set timeframe for a specified list of future goals – like providing for loved ones or having a stress-free retirement – may find that an investment manager is a better fit. 

Have Questions on the Right Financial Services for Your Ambitions? Saddock Wealth Can Help! 

Our experienced and professional team at Saddock Wealth is always available to answer questions and provide guidance on the best financial services for your distinctive situation and goals.  

Reach out to us today to start the conversation, and we’ll work together to craft a smart investment strategy that will align with all of your ambitions for the future.  

Contact us today. 


Investment Management