Can someone explain to me what an asset manager does?

[settlement12]

Is their job to beat the market? To avoid tax? How do they make money - is it via fees?

[UpperNwGuy]

Here's a good summary:

https://www.investopedia.com/terms/a/as ... gement.asp

[Cyclesafe]

Their job is to take as much as possible from their client's assets for the benefit of themselves and their firms. When a client goes to a doctor, he/she doesn't expect to get more sick and can sue if the doctor misrepresents or bungles. When a client goes to a FA, it's on him/her with little recourse.

In before the lock.

[snackdog]

A lot depends on what type of asset she is managing. Could be money, property, or even business assets.

[dknightd]

Is their job to beat the market? To avoid tax? How do they make money - is it via fees?

In an ideal world, they make money for you, and make money for themselves. But it is a job, so the priority might be making money for themselves.

[z3r0c00l]

Their job is to take as much as possible from their client's assets for the benefit of themselves and their firms. When a client goes to a doctor, he/she doesn't expect to get more sick and can sue if the doctor misrepresents or bungles. When a client goes to a FA, it's on him/her with little recourse.

In before the lock.

Their job is to push right to the legal and ethical limits, occasionally past them, while attempting to extract money from clients through the most profitable investments for them that are arguably not completely wrong for the client, if far from ideal. See used-car salesman and timeshare broker for similar career paths, although the former is probably less riddled with scams now with the help of the internet leveling the information gap for consumers. For example they might try to sell an 81 year old an annuity with a 10% EWP in the first few years and a 1+% annual fee.

[alex_686]

They make money via fees.

Some try to beat the market, others to match, but many don’t try to beat the market.

A good example would be pension and insurance portfolios. Here they are trying to meet the mandate, making sure there is enough money for the required payout.

[alrick]

Woody Allen defined an asset manager as one who invests your money, and then continues to reinvest your money until it's all gone!

[dknightd]

It is a job, just like any other. You want to make money, but you also want to have happy customers and/or employers.
It is not different than any other job. You provide a service, the customer pays for it.

[dknightd]

Woody Allen defined an asset manager as one who invests your money, and then continues to reinvest your money until it's all gone!

Woody Allen was a comedian. He made money by making people laugh.

[rjbraun]

Is their job to beat the market? To avoid tax? How do they make money - is it via fees?

I will assume OP is asking about the role of an institutional asset / investment manager.

Whether the manager seeks to beat the market depends on their particular, stated investment strategy. Ditto for tax-avoidance.

In general, an investment manager would make money via fees. The fees could be a flat percentage of the assets under management or they could be tied to the manager's investment performance. Or it could be a combination of these two, i.e., flat management fee plus an incentive (performance) fee.

The investment strategy (approach) as well as fee information should be disclosed (among other things) in the account management agreement or a prospectus (in the case of a mutual fund, for example).

I think of the asset manager as the one doing the actual security selection. They are picking the particular stocks or bonds, say, to buy or sell.

There is also the role of advising on the particular funds, strategies, or asset classes (e.g., stocks, bonds, etc.) to consider for investment. The "advisor" could have discretion to make the decisions for the end-user or could do this on an advisory basis. Compensation may also be via fees.

[psteinx]

Personal asset managers (i.e. the types who work at Ed Jones or the like) can and/or should:

1) Encourage folks to save
2) Help folks navigate broad savings vehicles (401K, taxable, 529, etc)
3) Help folks assess their risk tolerance, and hold their hands to some extent when they get jumpy in market volatility
4) Select funds (typically) within categories (stocks, bonds, etc.) May help with individual security selections (muni bonds, etc.)
5) May help with life insurance, disability, etc.
6) May help navigate major life expenditures (house, college, and especially retirement)
7) May offer guidance on retirement options (timing of retirement, SS claiming, annuities)

That's probably not exhaustive. Not every advisor does everything, nor necessarily does them well, but then, folks don't necessarily do them well on their own, either. (Don't assume that the typical American is at the investment competence of the typical multi-thousand post history BH forum poster).

The term "asset manager" is a little indistinct/non-standard, and if you mean a mutual fund manager, or an asset manager for a bank, or whatever, that's a different gig.

[alex_686]

Here is a interesting thought. I am kind of a asset manager at work. I am paid to loose money. I work with a hedged portfolio. On the days that I make money the real business is probably taking a massive hit. My mandate is one of risk reduction and firm insurance. I am so not trying to beat the market.

[Charles Joseph]

Is their job to beat the market? To avoid tax? How do they make money - is it via fees?

Their job is to take money out of your pocket and put it in their pocket.

[Charles Joseph]

Some try to beat the market, others to match, but many don’t try to beat the market.

So since the odds of beating the market are overwhelmingly against them, and matching the market can be done by anyone, the types of charlatans you describe are just ripping people off.

[alex_686]

Some try to beat the market, others to match, but many don’t try to beat the market.

So since the odds of beating the market are overwhelmingly against them, and matching the market can be done by anyone, the types of charlatans you describe are just ripping people off.

No. You can see my above post where I am paid to lose.

I am a modest proponent of active management. Why would anyone want to beat the market? Please be specific. Maybe bragging rights but that is about it. The point is to create a portfolio which helps the client meet their goals.

[arcticpineapplecorp.]

Is their job to beat the market? To avoid tax? How do they make money - is it via fees?

Their job is to take money out of your pocket and put it in their pocket.

their job is to use their experience with your money and turn it into their money and your experience.



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