In this article, we consider the benefits of asset management in helping you plan your financial affairs.
Asset management firms offer a range of services, involving the purchase, sale and management of assets on behalf of their clients. The purpose of asset management is to help clients generate rewarding returns on their investments and expand their financial portfolio. The objective is to maximise an investment portfolio’s value at an acceptable risk level.
When engaging the services of an asset manager, you should identify what tolerance level of risk you have. This will depend on your unique circumstances. The older you are, the more conservative you are likely to be, whereas a younger investor may feel more inclined to take bolder financial gambles. Most people, however, lie somewhere in between.
By knowing what their client’s threshold is, an asset manager can perform a risk assessment to help determine which investments to make in order to satisfy agreed financial goals. These might include bonds, stocks, property, commodities, mutual funds and alternative investments.
How does asset management differ from wealth management?
While the terms are sometimes used interchangeably and the concepts are similar, asset managers are tasked with efficiently managing a client’s investments, such as property, stocks or fixed income securities, whereas a wealth manager is more commonly understood to look after the entirety of someone’s financial affairs. In the latter’s case, this includes areas such as asset management, tax, retirement and estate planning, insurance, education or charitable donations.
Asset management services are provided by asset managers (also known as portfolio managers) who are hired for their expertise, trustworthiness and integrity when acting in your interests.
There are various types of asset managers, covering a range of assets and services. These include Registered Investment Advisers, Brokers, Financial Advisers and Robo-Advisers. Some work independently, while others are employed by asset management companies, investment banks or other financial institutions.
Any firm seeking to obtain a licensed status within the UK asset management sector must apply for authorisation from the Financial Conduct Authority (FCA). For their services, asset managers generally charge an investment management fee, which averages between 1% to 2% of assets.
If you have a portfolio and are considering your options for asset management in Cheshire, get in touch with local financial specialist Hartey Wealth Management today to set up an appointment.
