What is “Asset Management”?
Well, obviously it has something to do with the management of assets, Sherlock’s grade school cousin could have figured that out. In terms of services rendered to a client however, Asset management can have two more specific definitions.
The first relates to financial advisory services that financial advisors can provide a company. This includes coordinating and overseeing the financial portfolios of their clients by suggesting profitable investments, recommending budgets as well as handling the particulars of taxes, insurance premiums and accounting.
The second definition relates to corporate finance and the management of company assets. It describes the process of ensuring that finances are invested wisely, accounted for and efficiently used to generate profits.
How Does Asset Management Work?
There is one important goal that an asset management company has when providing service to a client, this is to see that the client’s portfolio steadily increases in value . Asset management is often requested by institutional investors to manage pension plans. Financial intermediaries, high networth individuals and corporations also use asset management companies to oversee their portfolios.
The asset management company will perform a series of important investigations upon which their professional opinions and suggestions will be based. These include statistical analyses of companies and Real Estate Trends to ascertain their worth and establish which are conducive to profitable investment and which could be a money hole.
There is no official certification that qualifies the individual to be an “Asset Manager” yet firms usually require that their personnel carry specific registration within the exchange market as well as the National Association of Securities Dealers -the NASD
In corporate asset management the role of the management company may also include plenty of research and interviews but the direction the results will take is geared toward increasing the intrinsic worth of the company they are assisting.
This is done by carefully analyzing and evaluating production operation management, maintenance habits, employee discipline practices but more importantly asset financing options and accounting methods, which in turn will make intangible and fixed assets increasingly more efficient and reliable –even cheaper.
Why is this So Important?
Although there is no specialized career that trains the individual to become a proficient asset management, it could be said that anyone and everyone in the financial world is an asset manager to some degree.
This is usually the direct result of having to evaluate financially lucrative situations against “Apparently” lucrative investments that can actually be a real downer for a successful portfolio, and who isn’t managing a financial portfolio these days, if even their own.
The result of this is that many of today’s most successful and savvy financial professionals are judged by their ability to manage a financial portfolio either directly or indirectly. Results like these are highly valued in this financial era.
Proficiency as an asset manager is most clearly illustrated by performance, whether on an individual portfolio or a multi-billion dollar corporate portfolio, the performance of a financial genius will produce stellar results with a couple dollars –more than an amature could do with a billion.
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