Are Investment Management and Asset Management the Same?

Researchers say that most people don't have a clear idea between investment management and asset management. They may sound similar but they have some key differences. Before choosing one you must know the differences first.

Investment management and asset management both help in wealth growth but in different ways. So, want to know which one is better for you?

Here, in this blog, I will share the differences between them with their definition. You will also learn which plan is the right one for you here. So, let’s begin the discussion with the definition of investment management.

Defining Investment Management

Investment management means choosing the right investments for you like stocks, bonds, and mutual funds. This investment makes sure you get a good return.

So, you can easily manage your investments as it is quite easy to manage. Even if it is needed, you can simply hire an expert to do your work. Investment managers are also there to help you make a plan according to your goals for better results.

Defining Asset Management

Asset management means managing different assets such as real estate, stock, and bonds to increase wealth is known as asset management. It involves reducing risks setting financial goals, and building a mix of different investments.

Here you will also find physical items like property or equipment. So, overall the goal is to grow the wealth’s value or increase income over time.

Asset managers help with planning, buying, and taking care of assets. They spread out investments to lower risks. Large organizations, like pension funds and companies, often use asset management.

What's The Difference between Investment Management and Asset Management?

You will find some major differences between investment and asset management. To make the best plan you must know these differences So, the differences are:

• Scope of Management

Asset management and investment management have different focuses. Asset management looks after all types of assets, such as property, stocks, and even things like art. The aim is to grow your wealth in the long run by managing everything you own.

Investment management deals only with financial assets like stocks, bonds, and mutual funds. This focuses on the short-term result. Here, the manager makes the smart choices to get the best returns.

• Time Horizon

Asset management is a long-term approach. It is focused on slow, steady growth. Asset management works well for people thinking about their future. This also includes retirement or passing wealth to heirs.

Investment management works in the shorter term. Investment managers make moves based on market conditions and try to get better returns in the coming years. They adjust their portfolio often to take advantage of new opportunities.

• Client Goals

In asset management, the goal is long-term wealth growth. Clients want to build their wealth slowly and ensure their financial future is secure.

In investment management, the goal is more specific. Clients want to grow their money quickly by picking high-performing investments. It’s about getting the best returns from a carefully chosen group of assets.

Similarities Between Investment Management and Asset Management

Investment management and asset management are both focused on helping clients grow their wealth. However, they share some similarities that you should know. So, the similarities are:

1. Focus on Wealth Growth

Both management mostly focus on the same area which is increasing the client’s wealth. Though the ways are different the goals are the same. Through investments in stocks, bonds, or other assets, they always focus on the growth of the client’s money.

2. Customized Strategies

You can customize both strategies according to your requirements and this fact is the same for both. Both management can create strategies that have the flexibility to customize them according to the client’s goal.

3. Risk Management

Risk management is an important term for both investment and asset management. Managers of both management regularly monitor the market condition to follow the trends. They make adjustments according to the client's need for the best positive return.

4. Continuous Monitoring

Both investment and asset managers always monitor the client’s portfolio. This helps them make necessary adjustments to stay on track with the client’s goals, especially when market conditions change.

5. Regular Communication

Communication is a must for both of these managements. Managers of both investments mostly do the communication. They keep the clients updated on their portfolio’s performance.

6. Goal-Oriented

Both types of management are focused on achieving specific financial goals. The goals can be long-term or short-term but both management works to turn the goals into realities.

Who Needs Investment Management vs. Asset Management?

You might be wondering about who needs investment management and who needs asset management. Well, it completely depends on a person or an institution's requirements. Here, I will share more information about it.

Investment Management

A person or an institution with a smaller portfolio or those who are planning to start an investment mostly need this plan.

Suppose you have a specific goal or want to save for retirement, then this is for you. This is a good option for people who are fine with some risk and want to help grow their money.

Asset Management

People or institutions who have more assets and larger portfolios mostly need asset management. Suppose you have real estate, stocks, or other valuable items then you must need this,

It is also a good option for people who prefer less risk. Asset managers focus on protecting your wealth and ensuring it grows over time.

Corporate clients or those with more complex financial needs often choose asset management for a more complete strategy to manage their wealth.

Can You Have Both?

In one word the answer is ‘yes. You can use both for better outcomes than using one. Actually many people and institutions already do that so that they can cover all their needs with a combined plan.

For example, a huge business might use asset management to grow its assets slowly over time. They may also use investment management for quick growth through short-term investments.

Even sometimes, investors also use both to grow their wealth quickly. So, if you are tensed for both investments then you should talk to an advisor.

Wrapping up

In the end, investment management and asset management both are beneficial for a company or a person as they help in wealth growth. As they are different than each other, so you must know your goals first and choose one.

If you have a small portfolio or short-term goals then go for investment management. On the other hand, if you want long-term assets and also have more assets then you should go for asset management.

You can talk to an advisor to make the best decision. They know all these terms so that they will work as a guide for you according to your needs.