Asset Management

Asset management is something you’ve likely done without even realizing it! If you’ve ever transferred money from your checking account to savings account in order to get a higher interest rate or made a down payment on a home you’ve evaluated the risks of acting on your decision, as well as sought to maximize your return by correctly allocating those assets.

Asset managers manage those assets on a much larger scale. By focusing on asset management, financial advisors increase financial growth opportunities for their client’s investable assets.

Couple looking at benefits of financial planning

Determining Asset Management Success

The degree of success of your assets is determined by the effectiveness with which your investable assets are managed. Unfortunately, it isn’t always that easy. When evaluating asset managers, there are three key questions to keep in mind: 

1. What is Asset Management? 

Asset managers can be individuals or firms. They work with individual clients, families and organizations like corporations or universities. They use many different types of investments which can include stocks, bonds, derivatives, limited partnerships, real estate, and a host of other opportunities such as individually managed accounts (IMAs).

2. What do Asset Managers Do?

Asset managers aim to balance investment asset growth with risk, while also maximizing tax efficiency. This includes monitoring asset allocation, addressing liquidity needs, adapting to market fluctuations, and executing strategies to minimize tax burdens.

3. Should I hire an Asset Manager?

Excluding those who manage their own investments directly – and do not use mutual funds or similar investment vehicles – leveraging professional asset management services is largely beneficial. The degree to which a person uses asset managers, however, will vary depending on how much they are able to invest. High-net worth clients are best suited for asset management. For most people, the right financial advisor can provide the same benefits.

See The Top Local Financial Planners Near You

Our Ultimate Investing & Asset Guide Includes:

Do You Need An Asset Manager or a Financial Advisor?

Asset managers differ from financial advisors in more ways than one, in part due to the nature of each respective role. 

Asset management firms differ across the board. Some focus on managing pensions and retirement plans for large organizations, whereas others work with high net worth investors. One firm may focus on investing their client’s money in hedge funds while others create mutual funds. The key similarity between asset managers is that they directly manage how money is invested.

Financial advisor is a very broad term, encompassing anything from an insurance agent or accountant to a broker, investment advisor, or financial planner. Their work with clients can be specific or all-encompassing. 

Typically, those who refer to themselves as advisors offer a wide range of services, including investing, retirement, and insurance. They fall into two categories:

Registered Representative (RR)

These individuals act as brokers between a broker-dealer (investment company) and the client. They are governed by the Financial Industry Regulatory Authority (FINRA), which is a self-regulatory organization (SRO) not a government agency. As such, they are able to receive commissions from investment companies for the sale of financial products to clients. They are not required to follow fiduciary standards, either. Instead, they follow what is called “suitability,” which does not require them to put the interests of their clients ahead of their own, their firm’s, or their broker-dealer’s. Many RRs refer to themselves as fee-based financial planners. Registered Representatives are not asset managers, meaning they do not directly manage assets. 

Registered Investment Advisor (RIA)

RIAs, and those who work for them, Investment Advisor Representatives (IARs), are commonly referred to as commission-free planners or advisors.   RIAs are governed by the Securities and Exchange Commission (SEC). As a result, they are bound by a fiduciary duty to place the best interests of their clients above their own. In addition, they cannot receive commissions from third-party investment companies. Their only compensation must come directly from the client in the form of one-time or yearly fees RIAs and those who work for them. Registered Investment Advisors may be asset managers, but not always. Oftentimes, they outsource asset management functions to investment companies. 

Think of it this way: although most asset managers are investment advisors, not all investment advisors are asset managers. Zoe’s commission-free network of Registered Investment Advisors (RIAs) offer asset management services depending on your own unique financial situation.

Do I Need A Financial Advisor For Asset Management?

The modern wave of wealth management has enabled more accessible asset management. Technology has made access to investment products economical for all, not just the ultra-wealthy. The bad news is that technology has also brought a 24-hour news cycle right into our pockets and magnified our behavioral biases.

The value of a great commission-free advisor is not their ability to “beat” the market but to help you stay on track with what you are trying to accomplish with your investments and asset allocation. A great advisor will want to understand what you value, what keeps you up at night, your goals and aspirations, and then work backward from there in deciding what investments are necessary for your specific situation. 

Nationwide Advisor Network

Hundreds of advisors are part of the Zoe network. All of our advisors are vetted and Zoe Certified.

  • Experienced
  • Fiduciary
  • No sales