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If you are looking to build wealth but do not have the time or means to follow global markets on your own, hiring an asset management company would be a smart route to take.
Read on to learn more about what an asset manager is and what service they can provide for your financial needs.
What is asset management?
Asset management, also known as AMC, is the practice of expanding a financial portfolio and increasing overall wealth by acquiring, tracking, maintaining, and trading investments that have the potential to grow in value over time on behalf of others.
An asset management professional aims to mitigate risk on a client’s behalf while also aiming to maximize their financial health by handling their investment portfolio.
Asset management is a service provided by a financial institution catering specifically to high-net-worth individuals, government entities, and corporations. Asset managers make financial decisions on account of the client in hopes of creating more wealth opportunities.
Top asset management companies:
What do asset management companies do?
Ultimately, asset management has two main goals: increasing a client’s financial portfolio while mitigating risk at the same time. With that in mind, one of the most important questions asset managers take into consideration is how much risk the client is willing to take.
Risk looks different for every investor. For example, a retiree living on the income of their financial portfolio will be more disinclined to risks. At the same time, a younger individual would be more inclined to make higher-risk investments. Most people are somewhere in the middle. Asset managers consider that for each of their clients.
Based on risk tolerance, asset managers will determine which investments can be made or avoided, all while keeping the client’s goals in mind. Management professionals will invest in stocks, bonds, mutual funds, real estate, and others.
Asset managers are also expected to conduct extensive research and use various financial tools to determine the best investments. This includes statistical analysis of market trends, review of important financial documents, and anything else that will contribute to the client’s overall financial progress and asset appreciation.
How do asset management companies (AMC) work?
AMCs are hired to oversee investments made and maintained for high-net-worth clients, including individuals and corporations. Accounts are opened at financial institutions that offer check-writing capabilities, credit cards, debit cards, margin loans, and brokerage services.
Clients must deposit funds into their accounts which are usually money market accounts because they offer higher returns than a regular savings account.
The two types of accounts that they can choose from are either Federal Deposit Insurance Company, also known as FDIC insured, or non-FDIC insured accounts. This means that the FDIC will ensure reimbursement of up to $250,000 back to the client in certain unforeseeable events.
The bottom line
As many financial institutions provide a plethora of services and products, it is important to gain clarity on your financial goals and do your research before choosing the best company to handle your money.
As a big business owner, entrepreneur, or salaried worker who wants to invest but does not have the means or time to do it on your own, hiring an investment management company to make the right decisions for you would be a great place to start building wealth.
Are you interested in more information? Visit us today to get your business and financial goals started.
Information provided on Entrepreneur Guide is for educational purposes only. Your financial situation is unique and the products and services we review may not be right for your circumstances. We do not offer financial advice, advisory or brokerage services, we do not recommend or advise individuals to buy or sell particular stocks or securities. Performance information may have changed since the time of publication. Past performance is not indicative of future results