Managing complex financial portfolios can necessitate the services of a Financial Advisor. There are two types of financial management services that are often confused: Wealth Management and Asset Management.
While they may sometimes be used interchangeably, the two are not quite the same. Many financial services firms including the McGowanGroup Asset Management offer both Wealth and Asset Management services.
What Is Wealth Management?
Wealth Management takes a wide approach to your finances. It encompasses many different areas of your wealth, including Investments, Taxes, Insurance, Estate Planning, etc. It differs from Asset Management in that it focuses on more than just your investments.
Areas Covered by Wealth Management
Wealth Management services typically include the following:
- Cash Flow Analysis
- Tax Planning
- Retirement Planning
- Estate & Legacy Planning
- Investment Management
- Insurance Analysis & Planning
- Charitable Donations
- Coordination with other professionals (CPAs, attorneys, etc.)
This breadth of services is important for those who have a diverse financial situation with many moving parts.
Common Wealth Management Clients
Wealth managers often serve those who have encountered some complexities with their financial situation, often after a life-changing event that has serious implications for one’s overall wealth. For instance, someone who has come out of a divorce or had a death in the family could benefit from a wealth manager’s services, particularly if there are many different financial factors involved.
In addition, High Net Worth Individuals and Business Owners can benefit from solid Wealth Management services since they tend to have a wider range of financial needs to keep track of.
What Is Asset Management?
While Wealth Management takes a big picture approach to Financial Planning and Advising, Asset Management is focused on financial holdings and most of the Asset Manager’s attention tends to focus on Investments.
Asset Management mainly involves management of a client’s investment portfolio. The Asset Manager’s job is to increase the value of his or her client’s total assets and to achieve long-term investment goals. In order to do this, the Asset Manager monitors market trends, reviews the health of existing assets, evaluates investment opportunities, mitigates risk, and ensures that the client’s liquidity expectations are met.
Areas Covered by Asset Management
Asset Management typically involves the following services:
- Market Trend Analysis
- Portfolio Design
- Risk Assessment
- Tax Minimization
- Asset Allocation
- Monitoring Investments
Common Asset Management clients
Asset Managers often serve those who like to handle their own finances, but who prefer to have some help handling their investment portfolio. They may feel their financial affairs are manageable or they may be in the habit of using multiple professionals for these services rather than a single wealth management solution.
How Wealth and Asset Management Compare
In summary, the differences between Wealth and Asset Management are:
- Wealth Management is an all-encompassing approach to your finances, including other tangible assets.
- Asset Management focuses purely on your investment portfolio.
For some individuals and families, Asset Management is all that’s needed to handle their investment portfolio. However, those with more complex financial circumstances would likely benefit from the comprehensive approach of Wealth Management services.
The McGowanGroup Asset Management, Inc. is pleased to offer both Asset Management and Wealth Management services to clients. We stand ready to assist clients who need some help and are ready to provide guidance and comprehensive solutions to those with more complex scenarios. To speak with one of our Relationship Managers, please contact the McGowanGroup Asset Management today!