Investing Answers Building and Protecting Your Wealth through Education Publisher of The Next Banks That Could Fail
Investing Answers Building and Protecting Your Wealth through Education Publisher of The Next Banks That Could Fail

Asset Management

What it is:

Asset management has two general definitions, one relating to advisory services and the other relating to corporate finance.

In the first instance, an advisor or financial services company provides asset management by coordinating and overseeing a client's financial portfolio -- e.g., investments, budgets, accounts, insurance and taxes

In corporate finance, asset management is the process of ensuring that a company's tangible and intangible assets are maintained, accounted for, and put to their highest and best use.

How it works (Example):

An asset management company serving as an advisor to a client has one overriding goal -- to substantially grow its client's portfolio. Asset managers are often hired by institutional investors like pension funds, corporations, and financial intermediaries, as well as high net worth individuals.

Asset managers conduct research, interviews, and statistical analyses of companies, markets, and trends in order to determine what investments to make or avoid on behalf of their clients. Asset managers do not generally need "asset manager" licenses, though the firms that hire these managers often require registration with one or more exchanges and/or the National Association of Securities Dealers (NASD).

In corporate finance, asset management requires finding ways to maximize a company's value by managing fixed and intangible assets to be more reliable, efficient, or cheaper -- including evaluating asset financing options, asset accounting methods, productions operation management, and maintenance discipline.

Why it Matters:

Although most financial jobs don't carry an official "asset manager" title, the truth is that nearly everyone in the finance world is an asset manager.

As a result, most financial professionals are judged on their ability to successfully manage assets -- either directly or indirectly. Proficiency in asset management makes the difference between a mediocre and a stellar performance at both the individual and corporate levels.