What is asset management?

Asset management is the service of investing and managing wealth (assets) on behalf of individuals, companies, institutions and organisations. 

Asset managers make investment decisions to help grow their clients’ wealth over time. They buy and sell investments such as shares, bonds, funds and other financial products, using their expertise to balance risk against potential returns. 

Who uses asset management services?

Both private investors and large institutions or organisations use these services. Private investors often seek help managing their pensions or investment portfolios, while institutional clients include pension funds, insurance companies and charitable foundations with millions to invest.

Active versus passive management

Asset managers can follow different investment strategies to pursue growth. Active management means that fund managers analyse markets and make trading decisions based on their analysis to try to outperform market averages. Passive management takes a ”buy and hold” approach, typically tracking market indices with lower fees, but accepting market-level returns.

Choosing an asset manager

Professional asset managers have the expertise, time and resources that most private  investors lack. They monitor markets continuously, diversify investments across sectors, and regions and adjust strategies as economic conditions change. When choosing an asset manager, consider factors such as fees, investment philosophy, track record and communication style. 

You should also consider whether you want active or passive management and make sure your chosen manager's approach aligns with your financial goals, values and risk tolerance. Many asset managers offer strategies that consider environmental, social and corporate governance (ESG) factors alongside policies for responsible investing.