Asset management refers to the professional management of investments such as stocks and bonds, along with real estate. Typically, this is only practiced by the very wealthy, as the services of a professional firm can demand considerable sums of money, and successful asset management usually requires a large and diverse portfolio. Numerous professional firms and investment banks offer asset management services, which are often handled by a team of financial professionals for the best results. The firms handling the largest accounts are based in the United States, although several venerable European firms also work with high volume accounts.
Typically, the investor meets with an asset management team before surrendering control of the assets to discuss goals and investment styles. In general, the team works with the investor to set realistic goals to grow the investor's wealth and measure the performance of the team. The investor also usually expresses directions as to what type of investment style he would prefer the team to engage in. For example, single young investors sometimes choose less conservative investment schemes than older individuals or couples. Meetings with the team are held on a regular basis so that the investor can be apprised of progress and kept up to date.
Typically, once funds are surrendered to an asset management team, the team has a great deal of leeway with them. This flexibility allows team members to make rapid investing decisions without constantly consulting the holder of the funds, who remains confident that the overall return on the investments will remain high. By putting funds under management, the investor has access to hundreds of years of combined investing experience, along with special services that only an investment bank can offer. This results in a higher return on the assets than could be achieved conventionally.
The best way to get a large return on assets is to diversify them. For this reason, assets are rarely pooled in one location alone, such as stocks, bonds, real estate, or mutual funds. The asset management team decides how to distribute assets, and may move money from one location to another to take advantage of a strong market. The team also provides long term investing advice based on market projections, and may assist the investor with purchasing real estate and general wealth management. Income from the assets is typically deposited into an account at the same bank, so that the investor's financial business is concentrated in one financial institution, rather than scattered, making it easy to see the whole picture.
