Asset Management

AAA

DEFINITION of 'Asset Management'

1. The management of a client's investments by a financial services company, usually an investment bank. The company will invest on behalf of its clients and give them access to a wide range of traditional and alternative product offerings that would not be to the average investor.

2. An account at a financial institution that includes checking services, credit cards, debit cards, margin loans, the automatic sweep of cash balances into a money market fund, as well as brokerage services.

Also known as an "asset management account" or a "central asset account".

INVESTOPEDIA EXPLAINS 'Asset Management'

1. The expense of this service generally restricts it to high net-worth individuals, governments, corporations and financial intermediaries. This includes such products as equity, fixed income, real estate, agriculture and international investments.

2. When individuals deposit money into the account, it is placed into a money market fund that offers a greater return that can be found in regular savings and checking accounts. The added benefit to individuals is that they can do all of their banking and investing at the same institution instead of having a bank and brokerage account at two different companies.

These types of accounts came about with the passing of the Gramm-Leach-Bliley Act in 1997, which replaced the Glass-Steagall Act. The Glass-Steagall Act was created during the Great Depression and did not allow financial institutions to offer both banking and security services.

VIDEO

Loading the player...
RELATED TERMS
  1. Money Market Fund

    An investment fund that holds the objective to earn interest ...
  2. Investment Bank - IB

    A financial intermediary that performs a variety of services. ...
  3. Glass-Steagall Act

    An act the U.S. Congress passed in 1933 as the Banking Act, which ...
  4. Portfolio Weight

    The percentage composition of a particular holding in a portfolio. ...
  5. Portfolio Income

    Income from investments, dividends, interest, royalties and capital ...
  6. Last In, First Out - LIFO

    An asset-management and valuation method that assumes that assets ...
RELATED FAQS
  1. How does seasonality affect the financial services sector?

    The seasonal trends in financial services vary depending on which subset of financial services is being considered. For example, ... Read Full Answer >>
  2. What other sectors are most similar to financial services?

    Typically, the financial services sector allows countries to export goods and turn agricultural and manufacturing products ... Read Full Answer >>
  3. What is the difference between investment banks and merchant banks?

    Merchant banks and investment banks, in their purest forms, are different kinds of financial institutions that perform different ... Read Full Answer >>
Related Articles
  1. Investing

    What is Asset Management?

    In the investment world, asset management refers to active management of an investor’s portfolio by a financial services company – usually an investment bank.
  2. Mutual Funds & ETFs

    Separately Managed Accounts: A Boon For All

    We provide an explanation of individual cost basis and the advantages it brings to these accounts.
  3. Options & Futures

    Wrap It Up: The Terms And Benefits Of Managed Money

    Find out if fee-based investing is right for you, by learning its terminology and types of investment vehicles.
  4. Professionals

    Preparing For A Career As A Portfolio Manager

    Find out what it takes to win a spot in one of the most coveted financial careers.
  5. Retirement

    What Was The Glass-Steagall Act?

    Established in 1933 and repealed in 1999, the Glass-Steagall Act had good intentions but mixed results.
  6. Entrepreneurship

    Which is The Best Bank for Your Buck, BAC or MS?

    One things stands out between these financial services giants when it comes to investing in them.
  7. Savings

    Which Are The Best Credit Cards To Take To China?

    Credit cards are now much more widely accepted in China – and one issuer leads the pack, due to its deal with China UnionPay, the Chinese bankcard network.
  8. Credit & Loans

    Chase Sapphire Preferred Vs. AmEx Platinum

    Chase Sapphire Preferred has many rewards and is much cheaper. Is American Express Platinum worth its premium price? That depends.
  9. Credit & Loans

    How to Challenge & Win A Credit Card Dispute

    Found an error on your credit card statement? Five strategies to persuade the card issuer to fix it in your favor.
  10. Credit & Loans

    Review: Barclaycard Rewards MasterCard

    If you're looking for a rewards card and you have an average credit score, this one's worth investigating.

You May Also Like

Hot Definitions
  1. Risk Averse

    A description of an investor who, when faced with two investments with a similar expected return (but different risks), will ...
  2. Fixed-Charge Coverage Ratio

    A ratio that indicates a firm's ability to satisfy fixed financing expenses, such as interest and leases. It is calculated ...
  3. Efficiency Ratio

    Ratios that are typically used to analyze how well a company uses its assets and liabilities internally. Efficiency Ratios ...
  4. Fixed Cost

    A cost that does not change with an increase or decrease in the amount of goods or services produced. Fixed costs are expenses ...
  5. Subsidy

    A benefit given by the government to groups or individuals usually in the form of a cash payment or tax reduction. The subsidy ...
  6. Sunk Cost

    A cost that has already been incurred and thus cannot be recovered. A sunk cost differs from other, future costs that a business ...
Trading Center