Back to all articles

Asset management vs wealth management – decoding the jargon

Understanding the distinctions between asset management and wealth management is useful in simplifying the complexities of financial planning. All investors can benefit from the advice and guidance of a qualified and objective third party, regardless of the size of the portfolio.  However, the larger the portfolio, the more complex the planning becomes, and may require estate planning, tax planning, advice on local and offshore trusts, or even business assurance in the case of entrepreneurs.

Investors in this space need specialised and personalised advice and this is where wealth management comes in.  Asset managers, on the other hand, are focused on growing the money invested with them, on behalf of investors, preferring to leave the advice component to qualified financial advisers. Asset managers oversee investment portfolios with the aim of achieving specific financial objectives such as capital appreciation, income generation, or risk mitigation.

Asset management can be offered through different types of investment vehicles like unit trusts, exchange-traded funds (ETFs), or separately managed accounts (SMAs). The scope of asset management typically revolves around optimising investment returns within defined risk parameters.

Imagine you are buying a car.

One can compare asset management to the process of purchasing a specific component of a car, such as the engine or the tyres. In this scenario, you are focused on optimising the performance of that specific part of the car. Asset management involves the management of specific financial assets, like shares or bonds. The asset manager’s role here is to care and maintain the car. They oversee the operation of the underlying components, doing regular maintenance, ensuring that the car gets the maximum mileage and operates in line with the driver’s expectations.

Now consider wealth management as the entire process of purchasing and owning a car, from selecting the model and negotiating the price to ongoing maintenance and insurance. Wealth management encompasses a comprehensive approach to managing your overall financial well-being, much like managing all aspects of owning and maintaining a car.

Key differences between asset and wealth management:

Aspect Wealth Management Asset Management
Client Focus Individuals or families Individuals, institutions, funds
Scope of Services Comprehensive financial planning beyond investments Primarily investment management
Services Provided Financial planning, estate planning, tax strategies Investment selection, portfolio management
Objectives Preserve and grow wealth, address broader financial goals Optimise investment returns within risk parameters
Client Relationship Deep understanding of client’s overall financial situation and goals Focus on investment performance, transactional relationship

You work hard to secure your future, and the future of your family. Knowing that your investments are being looked after and will serve your needs in the future is non-negotiable for you. And that’s why having the right partner to accompany you on the journey is so important. Our two-pronged offering comprises advice, backed up by our investment offering.  These are designed to work in tandem to ensure that investors’ needs are taken care of during their working years, and that by the time they reach retirement, they have a good financial strategy in place.

Because we’re independent, our Graviton advisers can offer solutions not only from within our group, but also from other asset managers as well – always with the needs of the investor in mind. Advisers may also choose to maintain their independence, or partner with us instead. This is just another way in which we support adviser growth and independence.

We believe that when investors have the right advice, they – together with their advisers – can make the important decisions needed to secure their future, and to live and retire comfortably.  By partnering with specialist advisers and having the backing of Sanlam, we’re able to leverage the benefits of scale to our advantage to provide well-constructed investment solutions.




Disclaimer: Graviton Financial Partners (Pty) Ltd is an authorised financial services provider in terms of the Financial Advisory and Intermediary Services Act,2002. While every effort has been made to ensure the reasonableness and accuracy of the information  contained in this document (“the information”), the FSPs, their shareholders, subsidiaries, clients, agents, officers and employees do not make any  representations or warranties regarding the accuracy or suitability of the information and shall not be held responsible and disclaim all liability  for any loss, liability and damage whatsoever suffered as a result of or which may be attributable, directly or indirectly, to any use of or reliance  upon the information. The information in this document has been recorded and arrived at by Graviton Financial Partners (Pty) Ltd (FSP) Licence No. 4210 in good faith and from sources believed to be reliable, but no representation or warranty, expressed or implied, is made as to its accuracy, completeness or correctness. The information is provided for information purposes only and should not be construed as rendering investment advice to clients.
Print Friendly, PDF & Email
Show Comments

Comments are closed.

Forex rates by TradingView