Are you an investor? Are you looking to start investing? Creating a holistic financial plan can be daunting for investors, especially those who may be new to the industry. Objectives and markets can change in a heartbeat, making holistic financial management and investment planning a crucial part of any successful portfolio. So, what directions can investors go in? What should they know?
In this guide, we’ll discuss everything from Roth IRA strategies to the differences between investment management vs. asset management. Let’s start by first analyzing your current financial plan and why it may be dangerous in today’s markets.
No two financial plans are created equal. While your main goals might look similar to someone else’s, their investment strategy may not fit your unique financial situation. There are five main aspects to consider when first analyzing your financial management, and it all starts with planning—or struggling to plan—for the future.
Rewind five or ten years. Did you know then what you would be making today? And that can include your salary, investment returns, or any other form of income. An issue some investors may run into is that their current financial management assumes that they will continue to make a healthy amount of money. If your income suddenly slashes, it could seriously impact your retirement. So, to counteract this, it is important to establish what your “worst-case” scenario is. This can help you and your financial advisor create multiple plans of action to solidify your retirement goals.
When you first began investing, did you consider the outside costs that come with owning assets such as stocks? This is another mistake that is easy for new investors to make when considering their financial management strategies. For example, you could end up paying 2% or more in total investment expenses if your plan assumes that there are zero investment expenses out there.
Do you make this common financial management mistake? Your stock portfolio gained 20% in the previous fiscal year and you decide to sell most of it off at reposition. With a 4-5% tax hit, that 20% will look more like 15% when it is all said and done. Short-term gains are taxed at a higher rate, so it is important to consider the financial impacts of taxes before you decide to sell a large chunk of your investment portfolio.
For older investors, social security could be a great way to have a fantastic retirement. You paid your dues and now have the chance to be financially comfortable after you finish working. A lot of others, however, may not get this luxury. According to the 2023 Annual Report, the program may exhaust itself by 2033, meaning benefits may take a massive hit. For younger investors, it is important to plan for retirement without the traditional social security benefits we’ve known.
The final mistake investors make, by no true fault of their own, is not dying on schedule. The best financial management and investment strategies may plan for a life expectancy that you only have a 10% chance of achieving to account for the possibility of a longer life.
Now that we’ve identified some of the common pitfalls investors may face when building their investment strategies, let’s take a look at the core pillars of financial management. It all starts with establishing what the right plan is for your personal goals.
There are several ways you can manage your financial and investment strategies in today’s market. Two of these include investment management and asset management. So, which one is right for you? The answer depends on your ultimate investing goals.
Versus asset management, investment management involves handling financial assets and investments, going beyond mere stock trading to encompass budgeting, tax strategies, and more. It’s about strategically managing a portfolio to meet specific wealth accumulation goals through informed buying, selling, and holding based on market research and economic analysis. Pros include tailored strategies and active management.
Asset management, often used interchangeably with investment management, extends beyond securities to encompass real estate, commodities, and other assets. It focuses on understanding an investor’s goals for long-term capital growth, rather than short-term stock market gains. Asset management provides a holistic financial management experience, considering a wider array of holdings and needs.
If you’re looking to grow your wealth through financial management that encompasses primarily stocks and bonds, you may lean more on the side of investment management vs. asset management. However, if you already own many valuable assets such as homes, cars, and investments, asset management may be the way to go. If you’d like to talk with a trusted BIP Wealth advisor to learn more about these two strategies, please contact us.
Once you’ve identified whether you prefer investment management or asset management, it’s important also to consider the pros and cons of portfolio management and wealth management. These two strategies give investors two different paths for growing their wealth over time.
Compared to wealth management, portfolio management involves crafting a tailored financial plan considering risk and reward, aiming for high returns while managing overall risk. There are four types: active, passive, discretionary, and non-discretionary. Active management seeks to beat market benchmarks, while passive aims to match them. Discretionary managers make decisions independently, while non-discretionary managers require client input.
Wealth management, however, is a much more holistic financial management plan. This approach offers a broader spectrum of services compared to portfolio management, aiming to tailor strategies to clients’ diverse needs and long-term goals. It encompasses investment strategies, retirement planning, and more, ensuring holistic wealth growth and protection. Core elements include financial planning, asset allocation, asset management, estate, and tax planning.
Maintaining an investment strategy that can provide the best risk versus return is something that is always on the minds of investors today. So, how do Roth IRA strategies come into play? To start, they can help investors minimize the amount of tax drag, resulting in increased tax alpha. Effective Roth IRA strategies, if managed correctly, can potentially eliminate taxes. Since 1998, legislative changes have increasingly favored affluent investors in utilizing Roth IRAs. Investment managers can capitalize on these changes to enhance tax alpha for clients, often in collaboration with tax advisors. These strategies are generally low-risk and are welcomed by tax advisors aiming to minimize clients’ tax burdens.
To boost your Roth IRA strategies, the most basic technique is increasing the amount of money you put into it. As of 2024, the contribution limits are $7,000, with an additional $1,000 for folks over the age of 50.
Now that we’ve covered the basic aspects of financial management, let’s shift our focus to how to shape your investment strategies.
Defining what you want to accomplish through financial management is a critical first step to building a successful strategy. Do you have any existing assets you’d like to include in your financial management strategy? Are you looking for short-term gains? Long-term? These are just a few of the questions you should consider as you plan with your financial advisor as they help you get a clearer picture of your current and desired financial wealth status.
Once you’ve established your plan and set your overall goals, the next step is to figure out what you can and can’t afford to include in your financial management strategy. Budgeting helps you understand your income and expenses, giving you a clear picture of your financial situation. Budgeting for your investment strategy can also help you free up funds that can be directed towards investments, whether it’s in stocks, real estate, or retirement accounts.
Investing is not guaranteed to succeed. As a result, it is important to understand where you stand regarding risk. How much could you afford to lose if a stock price suddenly dips? Is your portfolio diversified to handle the rise and fall of stock prices? Managing risk can help investors maintain financial stability, both in the short and long term.
With the above information in mind, now it’s time to implement your investment strategy. There are a few critical steps to follow, the first being to have a critical eye when identifying your desired path forward.
To use a sports analogy, let’s think of your financial management strategy as a game of football. As the head coach of your wealth growth, it is important to think strategically about every move you make to ensure it aligns with your ultimate goals. At BIP Wealth, our advisors focus on factors such as investments, risk, and changing markets to quarterback your portfolio to success and act as your personal CFO.
We mentioned earlier in this guide that Roth IRA strategies can be the “holy grail” of tax-smart investing. By diversifying your investment strategy portfolio with retirement in mind, you can help establish long-term financial success for you and your loved ones.
Once you’ve nailed down your strategy, it is important to ensure your financial management strategy is robust and versatile. Set short and long-term goals for yourself, be specific in your objectives, and always account for taxes and inflation, as the two can dramatically affect your investment strategies at any time.
Keeping track of your financial management can be tricky. There are ways to streamline this process, however. At BIP Wealth, our proprietary platform—BIP ClientCare—helps clients manage and monitor your wealth. Talk to your advisor about how this tech platform can be utilized to help you.
At BIP Wealth, our trusted team of advisors helps clients achieve long-term financial success through holistic wealth planning that puts your personal goals and needs at the top. To learn more about our story and how we’re engineered to perform for you, be sure to get in touch with an advisor today. You can also check out our news and blog section to learn more about the headlines dominating the financial world today.
The main goal of financial management is to maximize the value of an organization or individual’s financial resources while mitigating risk.
Financial management, when done right, can help investors and organizations effectively manage their resources, make informed financial decisions, and plan for their financial future.
Financial strategies could include portfolio and wealth management, Roth IRA strategies, and even investment and asset management.
While answers will depend on your personal goals and financial situation, it’s good practice to budget for and track your investments over time.
Start by setting your goals and planning out a budget. From there, it’s all about creating the right investment strategy that sets you up for short and long-term success.
This communication contains general investing information that is not suitable for everyone and is subject to change without notice. Past performance is no guarantee of future results and there is no guarantee that any views and opinions expressed will come to pass. The information contained herein should not be construed as personalized investment advice, tax advice, or financial planning advice, and should not be considered a solicitation to buy or sell any security. Investing in the stock market and the bond market involves gains and losses and may not be suitable for all investors. Indices are not available for direct investment.
BIP Wealth is proud to announce the recent promotion of Jenni Brown to the role of Chief Marketing Officer (CMO). In the CMO role, Jenni continues to spearhead all strategic marketing initiatives for the firm, adding to the groundwork she made as Marketing Director for the past two years, where she advanced BIP Wealth’s reputation as a national leader in the wealth management industry.
“Jenni’s immediate impact to our brand and culture cannot be overstated,” says Nate Smith, COO of BIP Wealth.“ Since she joined our team in 2021, she has worked tirelessly to drive our brand forward by elevating the client experience, improving the office environment, and providing crucial marketing insights. Jenni’s promotion recognizes her tremendous contributions to date and her daily leadership throughout the organization.”
Throughout a career that spans over 20 years, Jenni has spent countless hours building lasting relationships and pursuing meaningful work at organizations such as Passion City Church, The END IT Movement, and Leader Enterprises. Jenni plays a crucial role in planning BIP’s dozens of client events annually, fostering a sense of community within its client base, managing its agency relationship with Marketwake, and revamping all of BIP’s marketing collateral, digital properties—including website and social media presence, and physical environments.
“I am thrilled to have found a home on the team at BIP Wealth where I can continue to grow in my career while serving our team and incredible clients,” shares Jenni. “The emphasis we as a firm put on people first starts at the top and makes for a positive place to work. I feel so lucky and motivated to continue to push our brand forward. As Mark Buffington, Co-Founder of BIP Wealth and CEO of BIP Capital says, ‘BIP Wealth is the best-kept secret in wealth management’ and I want to let more people in on that secret!”.
As CMO, Jenni will leverage her extensive experience in marketing, design, communications, events, and PR to drive brand awareness, enhance engagement with clients, and cultivate meaningful relationships with stakeholders. Her incredible leadership abilities and visionary approach will play a pivotal role in advancing BIP Wealth’s growth objectives in the future and beyond.
The BIP Wealth team is honored to be named in Wealth Management IQ’s “RIA Edge 100” list. The list recognizes wealth management firms that have grown fast while always keeping the needs of their clients top-of-mind.
“We are delighted to be named to the RIA Edge 100 list. On top of recent honors from USA Today and the Atlanta Business Chronicle, seeing our firm’s name on Wealthmanagement.com’s list means everything to us,” Bill Harris, Co-Founder and CEO of BIP Wealth, said. “BIP Wealth’s top priority has and will always be serving our wonderful clients. Our firm’s continued growth is all thanks to the faith they have shown in us to manage their hard-earned wealth.”
Developed by Wealthmanagement.com’s research team in partnership with ISS MI, the list was created using data from the Discovery Data MarketPro platform.
To start, the RIA Edge 100 list is not a traditional award as RIAs cannot apply for this list. Additionally, they are not considered based on factors such as social media popularity or business relationships. The list comes down to the top 100 firms that display healthy growth and a true commitment to serving clients.
This means a lot to our team, as we did not submit anything to be considered for this honor.
“Knowing that BIP Wealth made the list because of our hard work is something to celebrate,” said Harris. “We hope to remain on the RIA Edge 100 list for years to come.”
So, how did BIP Wealth qualify for the honor?
The first metric the Wealth Management IQ research team used was whether the RIAs they analyzed were SEC-registered. Qualifying firms were also required to have high-net-worth individuals as part of their client base and manage at least $500 million in assets.
This metric is important for our team as it helps spotlight our firm’s growth. We’ve grown to $3.3B AUM at BIP Wealth, and are excited and honored to continue growing.
As the RIA Edge 100 list is data-backed, key metrics such as AUM (assets under management) growth over one and five-year periods, the ratio of employees to clients, and the average size of client portfolios were also considered. At BIP Wealth, we are also driven by data. Our wealth-creation engine leverages innovative technology and financial forecasting to help our clients personalize their wealth plans for future success.
At BIP Wealth, we combine precise financial science with the wisdom of industry experts to help our clients grow, manage, and protect what’s most important. For the past few years, we’ve been fortunate to have seen such growth in our assets under management, client base, and staff. From opening new offices in cities like Nashville to growing our BIP Wealth Baseball Division and acquiring a new RIA, we’re excited about what’s in store over the next few years.
“BIP Wealth would be nothing without our amazing clients and we cannot wait to continue serving them,” Harris said. “Making the RIA Edge 100 list will only motivate our team further.”
If you’d like to learn more about our firm or speak directly with an advisor, please reach out to connect with us. You can also check out our resources page to learn more about what’s new at BIP Wealth and in the financial industry.
Disclosure: The data for the ratings was as of 1/1/2024. BIP Wealth did not apply to be considered on the RIA Edge 100 list, nor did they provide any compensation in order to appear on the list.
BIP Wealth, recently named on wealthmanagement.com’s RIA Edge 100, as well as the top 3 on the Atlanta Business Chronicle’s 2023 Best Places to Work list for medium-sized companies, is proud to welcome the addition of former MLB outfielder Jeremy Hermida to its Baseball Division as Business Development Officer. Hermida joins former Pro Baseball players Kyle Schimdt, CFP®; John Hester, CFP®; and Chase Murray in the Baseball Division founded by former Major League Baseball pitcher Jim Poole.
Hermida was the Marlins’ No. 1 draft pick (11th overall) in the 2002 Major League Baseball draft and one of the highest-rated minor league players throughout his 3-year ascent to the MLB. He went on to play professionally for 14 years, 6 of which were in the majors for the Florida Marlins, Boston Red Sox, Oakland Athletics, Cincinnati Reds, and San Diego Padres. He ended his professional playing career in 2015 in Japan with the Hokkaido Nippon Ham Fighters.
Having Jim Poole as one of his personal and professional mentors for 7+ years, Hermida knew he wanted to be more involved with the Baseball Division at BIP Wealth. With his deep admiration and firsthand knowledge of the importance of having exquisite financial advice and guidance, it was an easy ‘yes’ for Hermida to move from being a client of BIP to joining the team. He considers his current role both an honor and a calling.
BIP Wealth’s Baseball Division provides investment management and sophisticated planning solutions geared towards the goals and objectives of draft-eligible, current, and retired professional baseball players and their families. Hermida is uniquely positioned to help guide clients through their journey of life on and off the field.
“BIP is in a class of its own when it comes to client care and expertise, and I am thrilled to be a part of the team,” said Hermida. “Being mentored by Jim Poole helped lead me to where I am today on the team. I started with a few private investment deals as a hobby and became more and more interested after my playing days. I’m so ready for this second career and the chance to take a more hands-on approach to guiding current and former players and their families as they prepare for the future.”
“Jeremy has been a part of the BIP Wealth family for the past 7 years as a client. We’re excited that he’s decided to take this next step in his post-playing life by joining our Baseball Division,” shared Bill Harris, CFP®, Co-Founder & CEO of BIP Wealth. “Jeremy has played baseball all over the world, so he knows first-hand the ups and downs of a professional career. His extensive playing experience and financial aptitude will be a strong addition to our team. The future success of BIP Wealth’s Baseball Divison just took a big step forward.”
Hermida lives in the Dunwoody area with his wife of 12 years, Lindsey, and their son and two daughters. Born and raised in Marietta, Hermida went and married a northern Jersey girl, so you can find them splitting their summer vacations between the south and the north.
Contact Jeremy: Jeremy Hermida, BIP Wealth Baseball Division, Business Development Officer
Press Contact: Jenni Brown, Chief Marketing Officer
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So, what does 43 days mean for current and retired baseball pros? It is the total number of service days required to qualify for the MLB Pension Plan. The Major League Baseball Player’s Association battled hard to get it in place, so in this blog, we’ll be explaining why it’s important for players to take full advantage.
When the time comes for a player to retire from professional baseball, having access to a share of the MLB Pension Plan can go a long way, especially for those whose careers may have been cut short due to injury. So, what exactly is the MLB Pension Plan? How does it benefit players? And how can a partner like BIP Wealth help baseball players secure their financial future?
The MLB Pension Plan is a type of employer-sponsored retirement plan, also known as a defined benefit plan. These types of plans provide retired professionals with a monthly payment based on a certain formula.
The MLB Pension Plan can be “turned on” as early as age 45, but by waiting until age 62, players would maximize their potential payouts. After hitting 43 days of service, which is defined as days spent on an active MLB roster or injured list, a player qualifies for 2.5% of the max payout. Every additional 43 days will accrue another 2.5% and so on until a player hits 10 years of service, which would qualify them for the max payout.
Currently, the average monthly MLB Pension Plan payout sits at around $7,500 per month, but those who wait until age 62 could top out at around $265,000 per year.
For young and active ballplayers, we recommend focusing on having the most successful and sustainable career possible, as this will directly impact your MLB Pension Plan qualifications. A partner like BIP Wealth will help you navigate the intricacies of your pension plan to better set you up for a successful financial future.
Once you enter your retirement years, our team will work to maximize your accumulated benefits and consider other savings methods, such as IRAs, Roth IRAs, and 401k plans.
The upside of having an MLB pension plan goes further than just the obvious benefit of players receiving a guaranteed monthly payment. The money players receive lasts for life, giving them a consistent income to lean into as they enjoy retirement or search for new career opportunities. There is a cost-of-living adjustment with MLB Pension Plans, so payments will increase over time based on inflation.
A retirement plan for MLB players can also give them a sense of financial security for their later years off the playing field. Savings, unlike funds from a pension plan, can easily be spent before retirement, which has led to an unfortunate 78% of former professional athletes going broke within three years of retirement.
On top of all of this, there are also spousal benefits that can be earned through the MLB Pension Plan. This can significantly help beneficiaries achieve the peace of mind that they and their families will be taken care of for life.
At BIP Wealth, we want to make sure every professional baseball player we take on as a client maximizes their financial potential. To do this, we not only help them through their MLB Pension Plan process but also create unique, life-long financial plans that fit the needs of themselves and their families.
As former professional baseball players, our financial advisors have a unique insight into the MLB Pension Plan and how to best plan for what comes after their playing days. This allows us to provide a perspective that most other wealth managers can’t. We’ve been in a player’s shoes, and we can relate to a player’s financial needs and worries.
To learn more about our services and how you can maximize your career earnings, contact us to speak with one of our advisors. You can also schedule a time to talk with us on the phone or at one of our locations in Buckhead, Alpharetta, and Columbus GA, as well as Nashville, TN.
How much do MLB players get for pension?
Major League Baseball players receive 2.5% of their max monthly pension plan payout, currently up to $265,000 per year, for every 43 days of active service.
How much is a 10-year MLB pension?
Once a player officially hits 10 years of service, they are eligible for up to $265,000 per year if they wait until age 62 to activate their pension plan.
How much is MLB’s pension per year?
The number varies depending on a player’s number of active service days. At the current max payout, a player would receive $3.18 million per year.
What is your experience and expertise in working with professional athletes, particularly professional baseball players?
At BIP Wealth, our Baseball Division advisors have all been professional baseball players, allowing us to provide clients with a unique perspective that is hard to find anywhere else in the industry.
How can you help professional baseball players optimize their taxes and make the most of their earnings during their playing careers and beyond?
Beyond maximizing their MLB Pension Plans, we take the time to understand a player’s unique financial situation and needs, creating tailored financial plans that can include 401ks, IRAs, and more.
This communication contains general investing information that is not suitable for everyone and is subject to change without notice. Past performance is no guarantee of future results and there is no guarantee that any views and opinions expressed will come to pass. The information contained herein should not be construed as personalized investment advice, tax advice, or financial planning advice, and should not be considered a solicitation to buy or sell any security. Investing in the stock market and the bond market involves gains and losses and may not be suitable for all investors. Indices are not available for direct investment.
For current and prospective investors in today’s diverse marketplace, there are a number of ways to manage your strategy and holdings. Two of these are investment management and asset management. If you’re unfamiliar with either of these, you’ve come to the right place. In this blog, we’re going to break down the two, including the scope and what an asset manager vs. an investment manager’s role will look like.
Because both strategies come with inherently unique paths to cultivating and growing wealth, we’ll also be examining the nuances between each that may align better with certain financial goals and aspirations. So, whether you’re an individual looking to invest for the first time, an individual looking to better manage your current financial investments, or an institution with vast resources, this blog will help shed light on which strategy may be the better fit for you. To start, let’s take a look at investment management vs. asset management.
To kickstart the investment management vs. asset management analysis, let’s first focus on the former. By definition, investment management is the handling of financial assets and other investments. It is important to keep in mind that this management strategy does not simply focus on buying and selling stocks, for example. It could also include strategies for budgeting, taxes, and more as well.
At its core, investment management is the professional art—and science—of managing a portfolio of securities, such as stocks and bonds, to ultimately achieve an investor’s specific goals. The primary goal is wealth accumulation through strategic buying, selling, and holding of these securities based on comprehensive market research, trend analysis, and a deep understanding of global economic factors.
Some of the pros you’ll find with investment management are the ability to create tailored strategies to your individual needs and goals and active management from your investment manager. At BIP Wealth, we focus on holistic wealth management and follow guiding principles such as expert insights and human connection, transparency and accessibility, and intelligent forecasting to help our clients navigate the road between risk and reward. To learn more, be sure to check out our holistic wealth management services page.
Asset management, though sometimes used interchangeably with investment management, encompasses a much wider range of wealth management. Think of it this way: Investment management can be considered a part of an asset management strategy, but asset management compared to investment management extends to a myriad of other tangible and intangible assets, including real estate, commodities, intellectual property, and sometimes even assets like artwork or vintage cars.
At its heart, asset management is also about understanding an investor’s unique needs and goals and focusing capitalizing on them in the long term. Because it encompasses so many more financial holdings, asset management vs. investment management may focus more on sustained long-term growth rather than short-term gains in the stock market, for example.
You’ll find that many of the pros to asset management are similar to investment management. Both asset management and investment management tend to give investors a much more holistic wealth management experience. Additionally, asset management may give investors access to alternative investments such as private equity and hedge funds. At BIP Wealth, our team of experienced financial advisors works to give our clients access to financial wealth opportunities that have historically been reserved for the ultra-wealthy.
Both asset managers and investment managers critical focus is on creating wealth for their clients. Now, there are some differences in the roles each takes on. Investment managers tend to focus specifically on the domain of stocks, bonds, and mutual funds. Their day-to-day may be more centered around market research, trend analysis, and portfolio balancing.
Asset managers, on the other hand, operate on a much broader canvas. They may put more focus into portfolio optimizations, strategizing with clients on the acquisition of, maintenance, and even the sale of a wide range of assets—from stocks to homes to luxury goods.
To put it simply, while both are stewards of wealth, their focal points differ. The investment manager is a craftsman, meticulously sculpting portfolios, while the asset manager is the mastermind, orchestrating an all-encompassing wealth strategy.
Because the journey of wealth management is a personal one, deciding which strategy may be right for you will take time—and be dependent on a number of factors. For individual investors who are looking to grow their wealth primarily through stocks and bonds, investment management may be the right way to go. For those who already own a high number of valuable assets, asset management may be the better choice. For larger organizations and businesses, the expansive and strategic purview of asset management also tends to align well, ensuring that assets are managed and grown cohesively over extended periods.
It is important to first consider your risk tolerance, as this can play a significant role in which strategy is right for you. If you prefer a more hands-on, active strategy with frequent adjustments, investment management’s active approach might resonate. Conversely, if you’re looking at long-term stability and diversified risk, asset management, with its wider asset base, might be more fitting.
If you have any questions or want to speak to one of our financial advisors, don’t hesitate to contact us. You can also check out our Resources to learn more about topics in the financial space, including portfolio vs. wealth management and why the Roth IRA is the “holy grail” of tax-smart investing.
What is the difference between asset management and investment management?
At its core, the difference between investment management vs. asset management is the scope of what is managed. Investment management tends to focus solely on stock and bonds while asset management can encompass a wider range of assets, such as homes and luxury goods.
Is an investment manager the same as an asset manager?
No. While the two share a similar role, asset managers tend to operate on a much broader canvas, including the management of a much wider range of financial assets, compared to investment managers.
Is asset management better than investment management?
It depends on what your financial goals and needs are. For individuals and organizations with many financial assets, asset management may be the better option. However, for individuals looking to start a stock portfolio, investment management may be the better choice.
This communication contains general investing information that is not suitable for everyone and is subject to change without notice. Past performance is no guarantee of future results and there is no guarantee that any views and opinions expressed will come to pass. The information contained herein should not be construed as personalized investment advice, tax advice, or financial planning advice, and should not be considered a solicitation to buy or sell any security. Investing in the stock market and the bond market involves gains and losses and may not be suitable for all investors. Indices are not available for direct investment.
When planning for your financial future, there are a number of routes you and your loved ones can take. Two of those routes are portfolio and wealth management. At first glance, they may seem very similar, but the two are significantly different from each other.
Portfolio management, also referred to as asset management, serves as a focused investment strategy, where investors seek to see the best possible returns while balancing risk. Wealth management, on the other hand, is a much more holistic approach, often involving everything from investments to retirement planning.
So, what differentiates portfolio vs. wealth management? And which option is right for you? In this blog, we’ll break it all down.
Let’s start the portfolio vs. wealth management discussion by first breaking down the main characteristics of each option. Both portfolio and wealth management present clients with a unique financial plan. In portfolio management, it’s important to consider risk versus reward. This is a focused, targeted approach in which investors invest in assets to try and secure the highest possible returns while managing their overall portfolio risk.
There are four different types of portfolio management. Active, passive, discretionary, and non-discretionary. In active portfolio management, the goal is to achieve higher returns than the market benchmark. In passive portfolio management, the goal is to match an index or benchmark’s performance. Discretionary and non-discretionary portfolio management deal with a portfolio manager’s ability to make decisions about an investor’s holding with or without their insights. Ultimately, the goal is the same: grow an investor’s portfolio through assets such as stocks.
A portfolio manager will typically be tasked with making investment decisions, managing assets, and ensuring that investments align with the established objectives and strategy. They analyze market trends and investment opportunities to make informed decisions that will contribute to the financial growth of the client.
In a discretionary arrangement, the manager can make decisions for their client without the need for ongoing authorization. In a non-discretionary arrangement, the client will reserve the right to accept or decline any potential strategy that their portfolio manager suggests.
When comparing wealth management vs. portfolio management, wealth management is much more comprehensive. This financial strategy encompasses a much wider range of services to better tailor the right approach to a client’s specific needs or long-term goals. It goes beyond investment strategies to grow and safeguard a client’s wealth over time. For example, a portfolio manager may reinvest funds from one stock to another while a wealth manager may complete the same step while also setting aside funds for a client’s retirement fund.
There are five core elements of a well-run wealth management strategy. The first is financial planning to reach both short and long-term goals. Asset allocation is the second, in which clients are given tailored strategies based on their goals and willingness to take risks. The third is asset management. Finally, four and five are estate and tax planning. Together, these five core elements make up a true holistic wealth plan for clients.
To put it simply, a wealth manager wears a lot of hats. They assess a client’s entire financial situation and devise a comprehensive strategy to meet the client’s goals. Their role involves continuous monitoring and adjustment of the financial plan to ensure it remains aligned with the client’s objectives, changing life circumstances, and market conditions. When the unexpected happens, a wealth manager must be ready to spring into action to help their clients navigate any newfound financial circumstances.
So, now that we’ve established what makes each strategy different, you might be wondering which option could be best for you. When analyzing portfolio vs. wealth management, it’s important to first ask yourself what your goal is. Are you looking for a short-term or a long-term financial plan? If you said the former, portfolio management may be the way to go. If you answered the latter, wealth management may be the better fit for you and your family.
It’s also important to consider how much risk you’re willing to take on as part of your financial and investment plans. Consider your goals and how you want to achieve them. We should note that neither portfolio nor wealth management strategies can ever guarantee returns. Always consult with a financial expert before rushing into any decision.
If portfolio and wealth management are on your radar, our team is ready to help you plan for the future. At BIP Wealth, we’re engineered to perform for you. Think of us as having your own personal CFO. We work closely with each client to create personalized plans based on empirical research with savvy integrations of alternative investments to help clients gain access to investment opportunities historically saved for just the upper class. Through family-style wealth management, including comprehensive estate, tax, and investment planning, our experienced team aims to foster a sense of belonging for each client. To learn more about our services, visit our financial planning page. You can also contact us to get in touch with one of our wealth managers.
What are the four types of portfolio management?
The four types of portfolio management are active, passive, discretionary, and non-discretionary.
What is the difference between portfolio and wealth management?
Portfolio vs. wealth management comes down to the level of services. Portfolio management focuses on assets and investments while wealth management focuses on long-term holistic wealth plans.
What is the difference between a financial advisor and a portfolio manager?
A financial advisor generally provides a broad range of financial planning and investment services to clients, while a portfolio manager tends to focus specifically on investments.
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The BIP Wealth team is excited to announce that we have again been named by the Atlanta Business Chronicle as one of Atlanta’s Best Places to Work. Other honorees include Cox Enterprises, ParkMobile, Mark Spain Real Estate, and many more. We’re honored to rank in the top 3 for Medium-sized companies for fostering an environment that empowers our employees to grow and develop.
The companies were categorized by their size and nominated by their employees. Extra Large (500+ employees), Large (100-499 employees), Medium (50-99 employees), and Small (10-49 employees) companies were selected by the publication based on a number of factors, including employee engagement.
Last year, our team was honored as one of the top Small companies to work for. Backed by our incredible growth over the past year, we moved up into the Medium companies category. This is a huge deal for our team, to say the least.
“At the heart of every great company lies its people. We’re honored to once again be recognized by the Atlanta Business Chronicle as one of the best places not only to work but truly build a career. Our employees do so much for our clients, and we could not be more proud of the effort they put forth each and every day,” says Bill Harris, CFP®, Co-Founder and CEO of BIP Wealth. “It’s our collaborative spirit that guides our work. We challenge each other to be the best versions of ourselves each and every day and I’m so grateful to our team for always going the extra mile for our clients.”
While in the office, human connection is one of our guiding principles. In the same mindset as our client work, we want our colleagues to feel heard and be successful. To learn more about the award and why our team was recognized, be sure to check out our feature in the Atlanta Business Chronicle.
Founded in 2007 with offices in Atlanta, Alpharetta, and Nashville, we help our clients improve their financial lives through highly personalized and differentiated planning and investment strategies. Through comprehensive services which include wealth planning and management, estate planning, insurance planning, and more, we help our clients address their current needs and meet their future goals.
The following values guide our approach:
At BIP Wealth, we guide with humility and respect, committing ourselves to serving the needs and best interests of our many clients. It is through servant leadership that we provide holistic wealth management services that are formulated to help our clients fortify their financial well-being.
We leverage a team-centric mindset to foster an environment of open communication, combining our diverse expertise to create optimal financial strategies for our clients. Our collaborative approach also applies to our clients, where we create regular touchpoints to maintain a fully transparent wealth management process.
As part of our commitment to offer industry-leading services, we hold ourselves accountable to a relentless pursuit of excellence. Our team endeavors to not only guide clients through evidence-based investment strategies but also help them unlock opportunities in private equity, venture capital, and private credit that have historically been reserved for just the ultra-wealthy.
Within our team and among our clients, we do our best to foster a sense of belonging. We extend our family-first ethos to everyone who interacts with BIP Wealth, creating a strong and supportive community.
At BIP Wealth, we’re partners you can trust. To meet the experienced team of financial advisors that drive innovation and personal connections, head over to our Who We Are page. You can also contact us to connect with one of our advisors.
