Asset management refers to the professional management of investments such as stocks and bonds along with real estate. Asset management is usually only practiced by the very wealthy, as the services of a professional firm can require considerable sums of money, and successful asset management often requires a large and diverse portfolio. Many professional firms and investment banks offer asset management services, which are often managed by a team of financial professionals for the best results. The companies that handle the biggest accounts are based in the United States, although several venerable European companies also handle high-volume accounts.
Typically, the investor meets with an asset management team before relinquishing control of the assets to discuss investment objectives and styles. Generally, the team works with the investor to set realistic goals to increase the investor's wealth and measure the team's performance. Typically, the investor will also express instructions about the type of investing style they would prefer the team to engage in. For example, young single investors sometimes choose less conservative investment schemes than older individuals or couples. Meetings with the asset management team are held regularly so that the investor can be kept informed of progress and kept up to date.
Typically, once funds are handed over to an asset management team, the team has a lot of wiggle room with them. This flexibility allows team members to make quick investment decisions without constantly consulting the fund owner, who remains confident that overall investment returns will remain high. By placing funds under management, the investor has access to hundreds of years of combined investment experience, as well as special services that only an investment bank can offer. This results in a higher return on assets than could be achieved conventionally.
The best way to get a great return on assets is to diversify them. For this reason, assets are rarely grouped together in one place, such as stocks, bonds, real estate, or mutual funds. The asset management team decides how to distribute the assets and can move money from place to place to take advantage of a strong market. The team also offers long-term investment advice based on market projections and can assist investors in purchasing real estate and managing wealth in general. The income from the assets is usually deposited in an account at the same bank, so that the investor's financial dealings are concentrated in one financial institution, rather than scattered, making it easier to see the whole picture.