What Is Asset Management? (Plus Types and Benefits)

By Indeed Editorial Team

Updated 19 October 2022

Published 23 July 2021

The Indeed Editorial Team comprises a diverse and talented team of writers, researchers and subject matter experts equipped with Indeed's data and insights to deliver useful tips to help guide your career journey.

Many organisations hire asset management companies to help them get the most out of their investments. Asset managers may assist individuals and investment banks by managing all or a portion of their portfolio of investments. If you are interested in working in asset management, then learning more about this career field may benefit you. In this article, we explain what asset management is, explore different types of asset management, and share a list of skills that can help you advance in your career as an asset manager.

What is asset management?

Asset management is the process of maintaining an investment portfolio for a business or an individual. To understand what is asset management, it's good to know the basic services provided through asset management. They include buying and selling investments. Successful asset management firms account for each client's unique circumstances, preferences, and risks to customise a plan based on their needs. Other key areas an asset manager may assess include a client's tax circumstances, liquidity expectations, and income level.

Understanding how asset management works is important for anyone in a prominent financial role. Accountants, controllers, CFOs, and other professionals in financial management positions can all benefit from pursuing additional training in asset management.

Related: How To Be a Wealth Manager (With Tips To Advance Your Career)

Benefits of asset management

Companies work with asset managers for a variety of reasons depending on their income, financial goals, and portfolio needs. Some of the most common benefits of working with an asset manager include:

  • Gaining expert insights into market trends

  • Limiting financial risk

  • Identifying future demands in the market

  • Saving time by outsourcing portfolio maintenance

  • Accumulating financial gains over time

What are the different types of asset management?

If you're considering a job as an asset manager, learning about the various types of asset management can help you determine which industry you want to work in and what the requirements are. Here are some of the most common types of asset management:

  • Enterprise asset management: enterprise asset managers work with organisations to maintain their fixed assets. They often work with maintenance and operations.

  • Public asset management: public asset management involves the maintaining of public institutions. Some institutions you may work with as a public asset manager include airports, parks, and schools.

  • Financial asset management: financial asset managers oversee investment accounts and hedge funds for high net worth individuals, businesses, and government agencies. They use data and industry knowledge to make smart investment decisions on behalf of their clients.

  • Infrastructure asset management: if you choose a career in infrastructure asset management, you may be in charge of maintaining, supervising, and replacing public infrastructure. Examples of public infrastructure include bridges, roads, waste disposal systems, water and sewer lines, and electric systems.

Related: How To Become a Hedge Fund Manager (With Skills and Tips)

Asset management vs. wealth management

While asset management and wealth management both involve working with clients to improve their financial situation, there are some key differences between these two services. Asset management focuses solely on investments, and asset managers typically work with high net worth clients who can meet the minimum investment. Wealth management, however, is more accessible to individuals or families who want to manage their general finances. Many people use wealth management services to protect their wealth and help them plan for their future goals, such as retirement or buying a house.

Related: Q&A: Why Pursue a Career in Wealth Management? (Plus Salary)

What does an asset manager do?

Asset managers offer advice to companies and individuals to help them invest their money in stocks, bonds, private equity, and real estate. Since the minimum investment is often quite high to work with an asset manager, they typically handle high net worth investments for businesses, financial intermediaries, corporations, and government agencies. Some of the most common job duties of an asset manager include:

  • Staying up to date on current market conditions

  • Calculating the risk and reward of each investment opportunity

  • Making investment decisions on their clients' behalf

  • Communicating with clients to inform them of changes in their investment portfolio

  • Evaluating, monitoring, and optimising investment plans for their clients

  • Collaborating with economists, financial analysts, and other finance experts

  • Creating financial statements and reports

  • Developing and handling client portfolios

  • Analysing financial statements

  • Developing portfolio strategies for clients that include the proper mix of stocks and bonds

  • Helping clients plan for retirement, distribute their assets, and maintain their estate

Related: Management Skills: Definition and Examples

Where do asset managers work?

While the work environment for asset managers may vary, they typically work full time in an office setting. Asset managers may also work for their own individual practices. Some common places an asset manager may work at include:

  • Commercial banks

  • Mortgage brokerage firms

  • Real estate asset management companies

  • Real estate investment trusts

What is the average salary for an asset manager?

The average national salary for an asset manager is $74,436 per year. The amount you earn as an asset manager may vary based on your education level, work experience, and the industry you choose to work in. The value and complexity of the assets you are managing will also impact your salary.

Related: Highest Paying Jobs in Singapore

What are some common job roles in asset management?

If you're interested in a career in asset management, there are several job roles you may consider learning more about. These are the three most popular jobs in asset management:

Economist

An economist assesses the condition of the market and uses data to predict trends that may impact a firm's investments. Some specific areas they analyse include a society's production of goods, services, and resources. They gather and compile this information to understand the effects of supply and demand and the influence different laws and regulations have on the economy. Economists also share this information with key stakeholders at their investment firm to ensure they make the best possible decisions when buying and selling investments.

Financial analyst

Financial analysts screen opportunities, research investments, and determine when to buy and sell assets based on current market conditions. Some factors financial analysts examine to make their decisions include business environments, the financial status of specific companies, market trends, and the expected outcomes. They also evaluate historical financial data to identify patterns and inconsistencies. Financial analysts often use this information to prepare reports for asset managers.

Related: 10 Most Essential Data Analysis Skills

Asset manager

An asset manager authorises changes to a client's financial portfolio. They are ultimately responsible for deciding to buy and sell different investments on behalf of their clients. Asset managers work closely with economists, financial analysts, and other finance experts to ensure they make the best decisions for their clients.

What skills do you need for asset management?

A good asset manager mitigates investment risks, assesses the appreciation of investments, and strives to determine the best financial plan for each client they work with. They understand that the decisions they make can have a significant impact on an individual or company's overall wealth and livelihood. Here are a few important skills that can help you become an excellent asset manager:

  • Attention to detail: as an asset manager, paying close attention to detail can help you identify patterns, trends, and inconsistencies in the market. This can help you improve your accuracy and decrease risks.

  • Effective communication: asset managers rely on building strong relationships with their clients and other finance experts to ensure they have all the information necessary to make smart investment decisions. Practise active listening and use clear, concise language to ensure all the parties involved understand their investment options and the potential outcomes.

  • Critical thinking and analytical skills: asset managers analyse large amounts of market data to determine whether they can buy or sell investments for their clients. Familiarise yourself with popular data technology programs and review financial journals or other industry resources regularly to stay informed.

  • Strong leadership: clients rely on asset managers to protect and improve their financial investments. Honing your leadership skills can increase your confidence, enhance your interpersonal skills, and make it easier for clients to trust you with their assets.

  • Time management: working in asset management is a fast-paced environment. Being able to prioritise tasks and manage your time well can help you ensure you buy and sell assets at optimal times to provide your clients with the biggest return on their investments.

  • Project management: purchasing and maintaining assets can be huge projects on their own. Thus, in order to handle these projects well, asset managers can benefit from possessing project management skills.

Related: Top 10 Accounting Skills to Include in Your Resume

Salary figures reflect data listed on Indeed Salaries at time of writing

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