Ever wonder what it’s like to oversee someone else’s money?
The asset management industry is a behemoth, with a collective $53 trillion under management. And it touches nearly everyone—from the ultra-wealthy investor to someone simply socking money away in a 401(k).
To find out more about what it’s really like to run someone else’s financial life for them, we spoke to Elle Kaplan, founder of LexION Capital, the only 100% women-owned asset management firm on Wall Street.
LearnVest: What exactly does an asset manager do?
Elle Kaplan: It’s someone who trades and invests assets—like stocks, bonds and hard assets [such as oil, natural gas, precious metals]—on behalf of clients so that they can meet their investment goals. And those goals span the spectrum, like buying a first home, funding a child’s education, retiring or setting up charitable foundations.
How does an asset manager differ from other financial advisers?
Wall Street intentionally changes titles and makes them confusing. So by title alone, it’s hard to tell the difference sometimes. Most of the Street is simply selling products, which might be insurance or self-branded mutual funds on which they’re paid a nice markup for selling. That’s very different from what an agnostic asset manager does.
With an asset manager, if something ends up in a client’s portfolio, it’s because we feel that product is the best for the client. We get no benefit for recommending anyone. We must legally act in our client’s interest.
An asset manager’s advice is also highly customized. You aren’t classified as the “high-risk” investor or the “medium-risk” investor. It’s an ongoing conversation because, just as your health concerns and needs might change, your financial priorities are going to change over your lifespan. Your parents or kids might get sick, you may lose your job or your might get a great bonus. Financial situations change, and your financial plans have to be flexible, as a result.
What’s the top misconception people have about what you do?
Investing is often portrayed in the news as akin to gambling or speculation. But it’s not a matter of betting on a stock and saying, “O.K., that’s it.” That’s gambling. That’s not investing.
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