Asset management is the business wherein a financial institution manages money on behalf of institutions, sovereign wealth funds, pension funds, corporations, and other large groups. These clients are often called institutional investors, and the asset manager, in turn, is called an institutional asset manager. Client funds are invested in financial assets like mutual funds, ETFs, individual stocks and bonds, hedge funds, private equity, and more.
Wealth management is essentially asset management where the client is an individual or family. It is all this, plus understanding an individual or family’s entire balance sheet, cash flows, budgets, goals, and other detailed elements of their financial situation. This can include terms of employment, funds held in trust or holding companies, insurance needs, and charitable giving.
In addition, wealth management firms also offer clients private banking services, which provide them with tailored 1-to-1 advice on retail banking products and services, such as mortgages and loans.
Overall, wealth management is a service that aims to help someone with their entire financial life — both assets and liabilities — whether in financial planning, gifting, or building the legacies they want to leave for their families.