Published on: August 2, 2021

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 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:

  • 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 complexities with their financial situation, often after a life-changing event that has serious implications for overall wealth. For instance, someone experiencing a divorce or death in the family could benefit from a wealth manager’s services, particularly if there are many 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 focuses on financial holdings and most of the Asset Manager’s attention tends to focus on Investments.

Asset Management mainly involves the 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 designed to protect and grow wealth and includes other tangible assets.
  • Asset Management is fiduciary portfolio management with a goal of providing cash flow, growing the portfolio, and mitigating risk.
  • 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.  Our team includes a Certified Investment Management Analyst, CIMA, and 2 Certified Private Wealth Advisors, CPWA.

We provide customized, fiduciary-based asset and wealth management from experienced managers backed by logistics support, data, and cutting-edge technology and deliver with true accountability. To speak with one of our Relationship Managers, please contact the McGowanGroup Asset Management today!

Frequently Asked Questions

What is the difference between wealth and assets?

Wealth is your overall financial picture that includes all your assets. An asset can be considered anything of value that can be converted into cash—it includes things like cash itself, real estate holdings, investments, and personal property.  Wealth, in comparison, is the accumulation of all of your assets minus all your liabilities to give an over-arching picture of your financial story.

What’s the difference between wealth management and financial planning?

Wealth management clients are typically high and ultra-high net worth individuals, thus, wealth management takes a broader, more overarching view of a client’s financial position and assists with more complex financial issues including philanthropic planning and family succession. Financial planning tends to be more concerned with everyday financial needs—like cash flow, budgeting, and saving for retirement and college. 

What is the difference between asset management and investment management?

While some use the two terms interchangeably, there are differences. Investment management oversees a client’s investments, and asset management, while it may also oversee a client’s investments, often also deals with the full range of a client’s total assets.