Find Top Local Wealth and Asset Management Companies in Your Area

Two different agencies primarily govern asset management companies. The Securities and Exchange Commission (SEC) specifically regulates investment advisory firms managing combined assets over $110 million. Additionally, any advisory firm that works with securities, whether managing client portfolios or not, falls under the SEC. The agency protects investors and ensures fairness within the securities market through a broad array of regulatory powers.

The Financial Industry Regulatory Authority (FINRA) enforces SEC regulations but is also responsible for overseeing brokerage firms and individual brokers. Anyone that sells securities to the public, either as a broker or a representative of a broker-dealer, is regulated by FINRA.

Because of the overlap between the FINRA and the SEC, many asset managers are registered and regulated by both bodies. In addition to national agencies, most asset management firms are further regulated at the state level as well.

Most wealth management companies get compensated by collecting fees equal to a fixed percentage of the overall value of assets under management (AUM). Fees are usually collected monthly based on an established annual fee.

Since finance portfolios can fluctuate daily, the exact dollar amount can change from month-to-month as well. To ensure appropriate compensation, many asset management firms also set a minimum annual dollar amount that must get paid.

Most asset managers charge a 1% annual fee. That means, if you had an investment portfolio worth $200,000 that didn’t fluctuate too much each month, you’d pay out $2,000 per year in fees. This total normally goes up as your asset managers grow your portfolio. This factor stimulates managers to do their best.

An alternative investment is any financial asset outside of the basic, conventional categories, which are stocks, bonds, and cash. Things like mutual funds, commodities, and even real estate are often classified as alternative investments. An asset management firm focused on alternative investments may provide additional expertise in the areas more closely aligned with your diversified portfolio.

Since many alternative assets are held by high net worth individuals, an alternative asset management firm is often best suited to manage their portfolio. As investments of this type often publish less performance data, the in-house analysis done at asset management firms can greatly help drive the success of your alternative investments.

Although these types of investments can be high risk, they provide ample opportunity for portfolio diversification and high rewards when properly managed.

Asset management companies and investment bankers achieve different goals for their clients and work for different client categories.

Asset management firms work to grow your investment portfolio to have it generate as much passive income as possible. Their goal is to assure you are getting passive income without being involved in any work.

Investment bankers specialize in raising capital for businesses. For example, if you have a business project, say a real estate development plan or creating a factory. You need funds for this. You hire an investment banker who helps you issue a bond sold to investors for money financing your project.

So the main difference is that you need an asset manager if you are a passive investor, and you may need an investment banker if you look for financing for your business project.

While having all or a part of assets managed by a fiduciary money manager, you can dedicate your time to creating new assets instead of managing the existing ones. Like this, you can achieve faster wealth growth.

Unfortunately, even with a professional asset management company, you are never 100% insured from loss. If your investment portfolio decreases in value because of factors outside the responsibility of the wealth manager, you will still have to pay them a fee which is a percentage of your total asset portfolio worth.

If you aren’t ready to delegate your assets for fiduciary management, you can also use wealth management firms to get investment advice or other limited services for your business. For example, many asset managers offer debt recovery and asset recovery as services.

Availing of asset management services is beneficial if you have enough assets to generate significant passive income. Consult asset management professionals to know what minimum amount of assets, and what kind of assets, you need to have in order to hire them.

Get consulted by a professional about your options by choosing one of the best asset and wealth management firms near you from our directory at Real Estate Bees. We’ve selected the most reputable and best performing asset management companies in your location to facilitate your research.