By Author: Avendus
We’ve always heard and learned with experience that as a company that managing the finances and having a solid strong back up of capital is very necessary for any business in times of crisis. When you run a business and earn profits, you can’t just keep it in the bank and treat that as savings. If you want to build your business empire, you need to manage this wealth and invest into assets that will raise the net worth of your company in due process. In order to do so, you will need to be guided in field of asset management and wealth management. You might even want to hire the asset and wealth management firms.
Wealth and asset management firms are very closely related to each other. Both of these involve putting in investment and money. However, when it comes to detail, there is a basic difference between the two. Wealth management is a broader term and involves dealing with the entire wealth of an individual and the company. Mainly involves individual wealth in which the wealth managers seek to maximise the wealth and financial status of the entire family raising their net worth. This involves many things such as planning estate, legacy, managing taxes, insurance, charity and planning the retirement of the high net individual.
In asset management, the asset management firms focus on the growth of their client’s money. It literally is the management of assets. Asset managers take a close look at the existing liabilities and assets of their clients and help them in raising their asset value. They help in determining what kind of asset allocation is best suited for your current financial situation. This could be a combination of assets, where one type of assets are growth assets such as stocks and the other are the fixed income assets such as bonds. Both kinds of assets contribute to the better functioning of the financial condition.
Asset managers typically earn money in sync with the percentage of profits under the asset management while wealth managers are mostly paid fees as a whole or on hourly basis.
As an entrepreneur it is necessary to understand that asset management focuses more on the growth of your business worthwhile wealth management focuses more on your personal financial growth. Hence, both these categories of money management play a massive role in making you, the business owner and the company strong. Usually, the role of asset management and wealth management are taken up by the same firms and then have bifurcation basis your requirements. You can decide which of the two types of money management do you want to go for depending on your situation.
However, be very meticulous in choosing the asset management or wealth management firms because this is a great deal of money that we are discussing about here. One wrong step by the asset or wealth manager could make it all go away. Therefore, being careful while choose a firm is very necessary.