October 17, 2016   by

investment-managemntProper management of assets and investments are an important factor when it comes to the growth of wealth. While they may sound different asset management and investment management are quite similar to one another with a few subtle differences.

What is Asset Management?

Asset management is the management of assets including real estate, stocks, bonds, etc.

Asset management services are financial services offered by professionals in which the value, financial health, growth potential and investment opportunities of various assets are identified in order to manage them successfully.

 Function of the Asset Management Firm ?

  1. To set financial goals with the investor, create projections, analyze data, and come up with a strategy for asset management and portfolio building.
  2. Asset management services are quite expensive and are, therefore, only used by high net worth individuals, who possess a diversified portfolio of assets.

Property asset management is one type of asset management in which a financial firm manages property such as office space, retail premises, industrial premises, etc. Property asset management includes rent collection, maintenance of buildings, lease management, etc.

Asset liability management refers to the management of risks that are created through the mismatch between the firm’s assets and liabilities.

These include the management of liquidity risk, interest rate risk, currency risk, etc.

What is Investment Management?

  1. Investment management is more related to the trade of stocks and bonds and other types of investment vehicles in order to make a profit and grow investor’s wealth.
  2. Investment management can be done at various levels. It can either be done by an investor himself or by a professional financial firm.
  3. Investment management is carried out by private investors such as mutual funds and exchange traded funds or institutional investors such as corporations, insurance funds, pension funds, etc.
  4. Investment management included financial statement analysis, portfolio strategy management, asset analysis, investment monitoring, etc.

Certain investors prefer to hand over complete control of their investment portfolio to professional financial managers without the need for consulting with the investor when making major fund changes.asset-mgmt

The Difference !

Banks provide asset management and investment management under the private banking umbrella of services.

  1. Asset management is used to refer to the collective management of investments and is, therefore, requested by larger high net worth investors with a large portfolio of assets at a significantly high cost.
  2. Investment management, on the other hand, can be carried out by large or small investors and can either be conducted by the investor himself or can be delegated to a professional financial services firm.

For a Chama intending to invest group money, the treasures needs educate members of the difference in the asset management and investment management investments that they wish to venture into.

This thus reduces any conflict in the future in the event that the group incurs any loss.

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This post was written by Anne Oyoo

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