Second-Guessing Your Financial Situation? Get an Unbiased Financial Planning Review

Most people worry about their financial standing. I get it. Money is on everyone’s minds, especially during these uncertain economic times.

long run investment

How to Create an Investment Portfolio for the Long Run

Investing in different assets is one of the best ways to improve your long-term financial stability. It allows you to build equity over time and diversify your investment portfolio for the best return. However, when it comes to building a portfolio, many people aren’t sure where to start or how to view individual assets under one cohesive system.

Understanding the Distinction: Asset Management vs. Wealth Management

Two prominent terms often arise when managing substantial financial resources: asset management and wealth management. Despite their frequent overlap in the finance industry, each serves distinctive functions catered to different client needs. 

Here, we delve into the nuances that distinguish asset management from wealth management, emphasizing their core objectives and methodologies.

Comparing Asset Management and Wealth Management

What is Asset Management?

Asset management is the strategic oversight of investments to increase the value of a client's assets. This specialized service is focused primarily on maximizing returns through active market participation. 

Asset management firms engage in rigorous market analysis, decision-making, and trade execution to grow investments, which may include real estate, stocks, bonds, and other financial instruments.

The Role of Asset Managers

Asset managers dedicate their expertise to enhancing the financial wealth of their clients, ranging from individual investors to institutional entities like pension funds. Their work is predominantly centered around investment growth, for which they employ various tools and strategies:

  • Financial Modeling: Asset managers use algorithms and statistical models to predict future investment returns, shaping strategies aligning with client objectives.
  • Risk Management: Asset managers aim to mitigate the risks associated with investing by employing diversification, hedging, and stop-loss orders, tailoring strategies to each client's risk tolerance.
  • Asset Allocation: This involves curating a diversified portfolio that balances risk and return, often integrating different asset types like bonds and stocks.
  • Financial Analytics: Using advanced software, asset managers analyze market trends and track investment performance to identify new opportunities.
  • Fundamental Analysis: This deep dive into financial health and industry trends helps asset managers assess potential investments for long-term growth.

What is Wealth Management?

Wealth management, in contrast, offers a holistic approach to managing a client's entire financial landscape, particularly for high-net-worth individuals (HNWIs). This comprehensive service extends beyond asset management to encompass all facets of a client’s financial life.

The Comprehensive Role of Wealth Managers

Wealth managers address a broader spectrum of financial concerns, which include but are not limited to:

  • Financial Planning: Structuring a financial plan that addresses income, expenses, assets, liabilities, and more, aimed at achieving both short and long-term goals.
  • Investment Management: Similar to asset management, this involves the strategic oversight of assets to foster growth.
  • Tax Planning: Wealth managers develop strategies to minimize tax liabilities through various tax-efficient practices.
  • Estate Planning involves preparing for the transfer of assets to heirs and may include drafting wills and trusts. These plans must always evolve with changing laws and personal circumstances.

Asset Management vs. Wealth Management: Key Differences

While both asset management and wealth management services are designed to foster financial prosperity, they cater to differing needs.

Asset management is focused on investment growth and primarily on maximizing returns through direct market engagement. 

On the other hand, wealth management adopts a more expansive approach, addressing a wide array of financial elements from estate planning to tax strategies, thereby providing a comprehensive roadmap for monetary security and legacy building.

Choosing between asset and wealth management should be based on individual financial goals and the scope of services required. 

Asset management is the go-to service for those focused solely on investment growth. However, wealth management is the optimal choice for individuals pursuing comprehensive financial guidance and planning that covers all aspects of their economic life.

rebalance investment portfolio

How to Rebalance Your Investment Portfolio

The initial asset allocation of your investment portfolio is crucial for long-term financial success. However, investments are not something that can be left unmaintained for years. Occasionally, the market will change, or your risk level will fluctuate. To make sure your target asset allocation stays consistent, you need to rebalance your investment portfolio.


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William Bevins Jr, CFP® CTFA

436 Main Street

Franklin, TN 37064


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