The term asset management can be thought of as a general title for an entity that manages another entity's money. Specifically, the term is used in the business world to give title to a company or a division within a company that has the job of ensuring the best possible use of available funds or capital.There are two distinct types of asset management. The first type refers to advisory services. The second type refers to actual corporate finance.
Advisory Services
An outside party acting as an asset management advisor for a client has one primary responsibility. This is to maximize growth potential by expanding the client's financial portfolio. Financial investment companies, pension fund entities, and wealthy individuals seek the advice of an asset management company on a regular basis.
The job duties of an advisory service include in-depth research on how a client's financial success is affected by market trends, competition from other similar firms, and the stock market itself. Investing is by nature a very complex business, with the most desirable funding and investment options changing on a weekly or even daily basis. An advisory manager is charged with the job of making sure that the best possible options are chosen to keep the client ahead of the pack in terms of long-term investment returns.
Corporate Finance Advisors
This type of asset management service focuses mainly on the day-to-day workings inside the client's company to achieve financial success on a long-term basis. In other words, finding ways to cut overhead costs, streamline production, and use less expensive materials for production.
Employee Benefits
An asset management service can actually dig down into the company's finances and decide whether the cost of a current program is equaled by the benefits offered. Asset management services can also assist with finding the best possible investment opportunities for employees. These include IRAs and other retirement programs. Health benefits and employee investment programs are generally the largest financial drain on a company's finances, but an experienced asset management firm can find ways to satisfy both the employer and the employees.
Do You Need Assistance?
If you are a corporation experiencing both runaway growth and runaway costs, it may be time to bring in the big guns and hire an asset management firm. Remember, the one and only goal of these advisors is to determine whether the current dispersal of available funds is efficient in terms of long-term investment return. Thousands of companies go out of business each year because a financial risk quickly backfires. Research on spending and its risks is handled by these advisors, and the amount paid in compensatory fees is usually far less than what is lost through an unwise transaction.
