Asset Management vs. Wealth Management


The decisions you make about your money today have an impact on your finances in the future. You want your savings and investments to add up to enough to support you in retirement. You may also want to have enough wealth to pass on to your children or give to charity after your death. Asset management and wealth management can help you make the best possible decisions about your money, but the two aren’t the same thing. Learn the difference between asset and wealth management and decide which one best suits your needs. 

Table of Contents:

What Is Asset Management?

Assets are valuable belongings you can convert into cash if you want. For example, a house is an asset, as you can sell it. Stocks are also assets. Asset management is the process of taking care of an individual’s or business’ assets, which can include investments and property.

When you work with an asset manager, they are likely to ask you your goals. Then, they’ll work to put together a portfolio that helps you reach your financial goals. Here are some of the tasks and responsibilities of asset management.

  • Creation of a portfolio: An asset manager often helps their clients put together a portfolio of investments and other assets. Portfolio development is also known as asset allocation. The types of assets in a portfolio depend on a person’s goals and how close they are to their goals.
  • Risk assessment: Risk assessment is part of asset allocation and portfolio design. An asset manager might recommend that a client near retirement invest in lower-risk assets. Meanwhile, a younger client might be better off investing in higher-risk assets, such as stocks. All investments have some risks. Asset management seeks to balance these with potential rewards.
  • Rebalancing of investments: As people move through life, their needs and goals change. Rebalancing investments is part of asset management. It means that a person might sell stocks and buy property as they get closer to retirement or invest in fixed-income assets instead.
  • Tax strategies: Asset management also typically includes some tax strategy, so clients don’t have to pay more tax than necessary on their earnings.
  • Monitoring investments and assets: Monitoring assets is also part of asset management. There’s a chance the market will change, making less-than-ideal options worth pursuing. Alternatively, shifts in the market can mean that a client is better off selling some investments.
  • Creating a distribution plan for assets: As individuals approach retirement, they are likely to start needing to tap into their assets for income. An asset manager can create a plan for distributing assets that maximize their worth, while minimizing their tax burden.

What Is Wealth Management?

While an asset is something of value that you can turn into cash, wealth is the measure of all the assets an individual or business has. One way to measure wealth is to add up the value of assets owned and subtract the value of any debts or liabilities from it. 

Wealth management is the process of taking care of an individual’s or business’ wealth. It takes a holistic approach to managing finances and assets. Here are some aspects of wealth management.

  • Retirement planning: A wealth manager can work with clients to help them set goals for retirement, choose the most appropriate investment and make a plan for accessing investments in retirement.
  • Tax planning: Tax strategies and planning are also part of wealth management. A wealth manager might help clients arrange sales of assets or plan purchases to minimize their tax burden. 
  • Estate planning: Wealthy individuals’ might be subject to an estate tax, which taxes the transfer of wealth. Wealth management can help a person plan for their legacy so that their family members get as much of their inheritance as possible.
  • Insurance planning: Insurance protects and preserves wealth. A wealth manager works with clients to ensure they have adequate insurance coverage.
  • Charitable giving planning: Donating to charity helps a person do good in the world and can reduce a tax burden. Charitable giving planning allows a person to maximize their donations and reduce taxes during their life and afterward.

What Is the Difference Between Wealth and Asset Management?

One way to understand the difference between asset and wealth management is that one is part of the whole. Asset management focuses solely on assets, such as property and investments. Wealth management includes asset management and all other facets of a person’s or company’s financial situation. 

An asset manager or a wealth manager can be a fiduciary, meaning they must prioritize their clients’ best interests. An asset manager who acts as a fiduciary can only recommend investments to a client if they believe that those investments will help them reach their goals. Wealth managers who are fiduciaries need to make recommendations to clients that will enhance their overall financial situation.

Another difference between asset management and wealth management is how the people hired to manage assets or wealth earn their income. Whether they are asset or wealth managers, fiduciaries are fee-based. They get paid a flat fee for their services, not for the assets they purchase.

An asset manager who isn’t a fiduciary might get paid on commission, meaning they earn a portion of the sale of investments. Meanwhile, a wealth manager typically charges a flat fee or a fee based on the value of the assets they manage.

Which Is Right for You?

Whether asset management or wealth management is right for you depends on your financial situation and overall goals. If you want a big-picture approach to managing your financial situation, working with a wealth manager is most likely the way to go. A wealth manager can give you guidance on saving for retirement, ensuring you have enough money to cover health care expenses or estate planning. Usually, wealth management is a solution for people with a high net worth.

Asset management can be the right option if you’re just getting started with investing and need help deciding where to put your money or how best to invest. You don’t need to have a lot in savings or a high net worth to work with an asset manager. As you build wealth, you can start considering working with a wealth manager, as well.

Schedule a Call With a Wealth Management Adviser at Nova Wealth Management

If you’re looking for advice and support for your complete financial situation, the wealth management advisers at Nova Wealth Management can help. We are a fiduciary, meaning we put our clients’ needs first and make recommendations in their best interests. To learn more about our services, schedule a call today.

About the Author

Picture of Amy Novakovich, CFP®, CRPC®

Amy Novakovich, CFP®, CRPC®

Amy is a Co-Founder of Nova Wealth Management. She is a native of Wisconsin and moved to Florida in 2004. She earned a degree in finance from Florida Gulf Coast University. Amy is a CERTIFIED FINANCIAL PLANNER™ professional (CFP®) and a Chartered Retirement Planning Counselor® (CRPC®).

For more information about any of our products and services, schedule a meeting today or
register to attend a seminar.

Contact Us

Florida Phone: 239.294.8724
Chicago Phone: 708.667.6384
Dallas Phone: 214.272.2336
Fax: 888.908.6052

Our Locations

Florida Location
24311 Walden Center Drive, Suite 200
Bonita Springs, FL 34134
Get Directions

Chicago Location
3333 Warrenville Rd
Lisle, IL 60532
Get Directions

Dallas Location
5956 Sherry Lane, 20th Floor
Dallas, TX 75225
Get Directions