asset management

What is Asset Management? Understanding asset management starts with defining the word “asset.” In the broadest sense, an asset is anything that delivers value to its owner and the stakeholder(s) it serves. Stocks, bonds, residential properties, and commercial office buildings are all examples of assets. In finance, asset management describes managing money on clients’ behalf. The financial institutions managing the money are called asset managers, and they develop and execute investment strategies that create value for their clients. Broadly, this process involves “putting money to work” by buying, holding, and selling financial assets with the potential to achieve a client’s investment goals. Examples of financial assets include stocks, bonds, commodities, shares in private funds, and more. Most importantly, asset management firms are “fiduciaries.” This means that, unlike other parts of the financial services industry, asset management clients provide full trading authority — also known as “discretion” — of their funds to their asset manager. In turn, asset managers are legally required to act in their client’s best interests.