An Investor’s Guide to Investment Management vs. Asset Management (2024)

For current and prospective investors in today’s diverse marketplace, there are a number of ways to manage your strategy and holdings. Two of these are investment management and asset management. If you’re unfamiliar with either of these, you’ve come to the right place. In this blog, we’re going to break down the two, including the scope and what an asset manager vs. an investment manager’s role will look like.

Because both strategies come with inherently unique paths to cultivating and growing wealth, we’ll also be examining the nuances between each that may align better with certain financial goals and aspirations. So, whether you’re an individual looking to invest for the first time, an individual looking to better manage your current financial investments, or an institution with vast resources, this blog will help shed light on which strategy may be the better fit for you. To start, let’s take a look at investment management vs. asset management.

Investment Management vs. Asset Management: A Breakdown of Each Strategy

To kickstart the investment management vs. asset management analysis, let’s first focus on the former. By definition, investment management is the handling of financial assets and other investments. It is important to keep in mind that this management strategy does not simply focus on buying and selling stocks, for example. It could also include strategies for budgeting, taxes, and more as well.

At its core, investment management is the professional art—and science—of managing a portfolio of securities, such as stocks and bonds, to ultimately achieve an investor’s specific goals. The primary goal is wealth accumulation through strategic buying, selling, and holding of these securities based on comprehensive market research, trend analysis, and a deep understanding of global economic factors.

An Investor’s Guide to Investment Management vs. Asset Management (1)

Some of the pros you’ll find with investment management are the ability to create tailored strategies to your individual needs and goals and active management from your investment manager. At BIP Wealth, we focus on holistic wealth management and follow guiding principles such as expert insights and human connection, transparency and accessibility, and intelligent forecasting to help our clients navigate the road between risk and reward. To learn more, be sure to check out our holistic wealth management services page.

Asset Management vs. Investment Management: What’s the Difference?

Asset management, though sometimes used interchangeably with investment management, encompasses a much wider range of wealth management. Think of it this way: Investment management can be considered a part of an asset management strategy, but asset management compared to investment management extends to a myriad of other tangible and intangible assets, including real estate, commodities, intellectual property, and sometimes even assets like artwork or vintage cars.

At its heart, asset management is also about understanding an investor’s unique needs and goals and focusing capitalizing on them in the long term. Because it encompasses so many more financial holdings, asset management vs. investment management may focus more on sustained long-term growth rather than short-term gains in the stock market, for example.

You’ll find that many of the pros to asset management are similar to investment management. Both asset management and investment management tend to give investors a much more holistic wealth management experience. Additionally, asset management may give investors access to alternative investments such as private equity and hedge funds. At BIP Wealth, our team of experienced financial advisors works to give our clients access to financial wealth opportunities that have historically been reserved for the ultra-wealthy.

The Role of An Asset Manager vs. an Investment Manager

Both asset managers and investment managers critical focus is on creating wealth for their clients. Now, there are some differences in the roles each takes on. Investment managers tend to focus specifically on the domain of stocks, bonds, and mutual funds. Their day-to-day may be more centered around market research, trend analysis, and portfolio balancing.

Asset managers, on the other hand, operate on a much broader canvas. They may put more focus into portfolio optimizations, strategizing with clients on the acquisition of, maintenance, and even the sale of a wide range of assets—from stocks to homes to luxury goods.

To put it simply, while both are stewards of wealth, their focal points differ. The investment manager is a craftsman, meticulously sculpting portfolios, while the asset manager is the mastermind, orchestrating an all-encompassing wealth strategy.

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Investment Management vs. Asset Management: Which Is Better For Me?

Because the journey of wealth management is a personal one, deciding which strategy may be right for you will take time—and be dependent on a number of factors. For individual investors who are looking to grow their wealth primarily through stocks and bonds, investment management may be the right way to go. For those who already own a high number of valuable assets, asset management may be the better choice. For larger organizations and businesses, the expansive and strategic purview of asset management also tends to align well, ensuring that assets are managed and grown cohesively over extended periods.

It is important to first consider your risk tolerance, as this can play a significant role in which strategy is right for you. If you prefer a more hands-on, active strategy with frequent adjustments, investment management’s active approach might resonate. Conversely, if you’re looking at long-term stability and diversified risk, asset management, with its wider asset base, might be more fitting.

If you have any questions or want to speak to one of our financial advisors, don’t hesitate to contact us. You can also check out our Resources to learn more about topics in the financial space, including portfolio vs. wealth management and why the Roth IRA is the “holy grail” of tax-smart investing.

FAQs

What is the difference between asset management and investment management?

At its core, the difference between investment management vs. asset management is the scope of what is managed. Investment management tends to focus solely on stock and bonds while asset management can encompass a wider range of assets, such as homes and luxury goods.

Is an investment manager the same as an asset manager?

No. While the two share a similar role, asset managers tend to operate on a much broader canvas, including the management of a much wider range of financial assets, compared to investment managers.

Is asset management better than investment management?

It depends on what your financial goals and needs are. For individuals and organizations with many financial assets, asset management may be the better option. However, for individuals looking to start a stock portfolio, investment management may be the better choice.

This communication contains general investing information that is not suitable for everyone and is subject to change without notice. Past performance is no guarantee of future results and there is no guarantee that any views and opinions expressed will come to pass. The information contained herein should not be construed as personalized investment advice, tax advice, or financial planning advice, and should not be considered a solicitation to buy or sell any security. Investing in the stock market and the bond market involves gains and losses and may not be suitable for all investors. Indices are not available for direct investment.

An Investor’s Guide to Investment Management vs. Asset Management (2024)

FAQs

Is there a difference between asset management and investment management? ›

At its core, the difference between investment management vs. asset management is the scope of what is managed. Investment management tends to focus solely on stock and bonds while asset management can encompass a wider range of assets, such as homes and luxury goods.

What is the difference between an asset manager and an investment advisor? ›

While an asset manager allocates and actively/passively manages your investment, the financial advisor takes a more expansive outlook on one's wealth and how to ensure that you get the most out of it and not purely to earn investment returns.

Is asset management or investment banking harder? ›

Investment banking typically requires greater sales skills while asset management requires greater quantitative and analytical skills. That said, the most successful professionals in either career have a good mix of both traits.

What is the difference between an asset and an investment? ›

Assets are “acquired” and owned, while investments are “made” and owned. The intent of an investment is appreciation of value over time. You may own real estate as an asset, but you may also invest in that same real estate with the intent of making a financial gain from it.

What is the difference between an asset owner and an investment manager? ›

When it comes to asset management, asset managers help their clients find different investment avenues and opportunities. In contrast, individuals who are into investment management specialise in asset classes (such as stocks and bonds) and help decide which asset should be made a part of the portfolio.

What is the difference between asset management and investment banking skills? ›

Key Technical and Soft Skills

Generally speaking, asset managers should have a good grasp of portfolio construction and risk management techniques, while investment bankers need strong valuation techniques, including discounted cash flow and comparable company analysis.

How hard is it to get into Goldman Sachs asset management? ›

Goldman Sachs is the premier investment bank in the world. With an acceptance rate of roughly 4%, it's harder to get into Goldman than it is to get into Harvard or Yale. Let me share how to get a job at Goldman Sachs from someone who did.

How many hours do asset managers work vs investment banking? ›

Asset managers can work up to 50 hours a week, while investment bankers are likely to work from 60 to 70 hours a week. Investment bankers and asset managers sometimes work weekends, depending on their workloads. They can engage in travel as the need arises.

Can you make a lot of money in asset management? ›

As a post-MBA Analyst at a large mutual fund, total compensation might be on par with what post-MBA IB Associates earn: around $250K to $350K. At the Portfolio Manager level, earning potential is around $1.0 – $1.5 million per year.

Is a stock an asset or investment? ›

Stocks are financial assets, not real assets. Financial assets are paper assets that can be easily converted to cash.

Do investments fall under assets? ›

For individuals, assets include investments such as stocks, bonds, and equity in a home. When assets are greater than liabilities, both a business and an individual are considered to have positive equity/net worth.

Is investment a liability or equity? ›

By looking at the Balance Sheet equation, you can determine how the company has financed its assets. They have two options: by borrowing (liabilities) and by using the shareholders' investment (equity).

Is an investment fund the same as an asset manager? ›

Asset management typically focuses on high-net-worth individuals and institutions, emphasizing long-term growth and risk management. Investment management caters to a broader range of clients, aiming to maximize returns often with higher-risk strategies.

Is asset management an investment company? ›

An asset management company (AMC) is an investment firm that pools money together from clients and uses that money to make a variety of investments for both institutions and retail investors. Often, you'll hear asset management companies referred to as money managers or money management firms.

What is the difference between an asset manager and an investment bank? ›

Investment banks serve their clients by offering advisory services, raising capital through debt and equity issues, and representing clients in M&A transactions. Asset managers invest client funds. They generate investment ideas, construct portfolios, and are responsible for ongoing portfolio management.

What is the difference between an asset management company and a portfolio manager? ›

Asset management may focus on specific types of investments, such as stocks, bonds, or real estate. wealth management may encompass a wider range of investments. Portfolio management typically involves constructing a diversified portfolio that may include a variety of investment types.

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