Why should Wealth Management be interested in asset-based finance?
At Channel, we provide high-quality, privately originated asset-backed investment products by originating, structuring, and managing investments for leading institutional investors. We specialize in opportunities from issuers in specialty finance and the innovation economy.
For borrowers, we are a trusted partner in growth. Our expertise in structuring tailored financing solutions ensures you get the capital you need to scale, with a streamlined process and terms that work for your business. We are committed to delivering flexible, efficient, and growth-focused funding that empowers your success.
Both asset and wealth managers focus on managing investment portfolios on behalf of their clients. However, there are some significant differences between asset management and wealth management.
Asset managers primarily work on growing their clients’ assets to maximize returns, whereas Wealth managers have a broader focus and offer a range of financial services and advice aimed at helping high-net-worth individuals (HNWIs) manage their wealth and achieve their long-term financial goals.
What Is Wealth Management?
Wealth management is a holistic approach to helping people with high net worth continue to grow their wealth and protect their current assets. It’s the highest level of financial planning services and includes a strategic plan and advice on multiple financial issues such as estate planning, asset management and tax strategy.
What Is Asset Management?
An asset is a resource expected to generate profit. Asset management involves managing clients’ investments to increase their value. Asset management firms monitor market trends, make investment decisions, and execute trades. Assets include real estate, stocks, bonds, businesses, patents, and other investments.
The Difference Between Them
Asset management focuses on strategically allocating significant assets and managing investments like mutual funds. Wealth management has a broader scope, providing diverse services like investment products, advice, legacy planning, tax services, and lifestyle management. Wealth management firms offer more comprehensive financial advice, often with specialised teams for high-net-worth individuals.
Cost Structure
Asset management fees are generally charged as a percentage of total assets under management (AUM). Clients can expect to pay less for the services of an asset manager due to their comparatively limited range of service. Wealth management is typically more expensive. Wealth managers may either charge a flat rate or, like asset managers, charge a percentage of a client’s total AUM.
Decision-Making Criteria
Asset management is ideal for managing investments. It can provide investment advice and portfolio management. For a holistic approach, including legacy planning and tax optimisation, wealth management is better. It manages risk more efficiently by considering your entire financial picture.
Client Needs Assessment
Asset managers focus on understanding a client’s risk tolerance, investment goals and goal timeline to develop a suitable investment strategy. Wealth managers consider a person’s entire financial lifetime and circumstances.
Why should Wealth Management should be interested in asset-based finance?
- Diversification of Investment Opportunities
ABF offers wealth managers and their clients access to alternative assets such as:
- Real estate
- Equipment leases
- Trade receivables
- Inventory finance
- Infrastructure and hard assets
- Attractive, Risk-Adjusted Returns
Asset-backed investments often deliver stable, predictable cash flows (e.g. interest payments, lease income). For HNW and UHNW clients, these can offer:
- Enhanced risk-adjusted returns in low-rate environments
- Higher yields than traditional fixed income
- Lower volatility than equities
- Customized Lending and Credit Solutions
From the client servicing side, ABF also enables tailored financing backed by personal or business assets:
- Liquidity solutions without asset liquidation
- Succession or estate planning strategies
- Art, yachts, aircraft, or real estate-backed loans
- Inflation Hedge & Real Asset Exposure
Many asset-backed strategies involve tangible assets, which may retain or grow value during inflation:
- ABF provides indirect exposure with contractual cash flow
- This makes it a compelling choice in inflationary or uncertain environments.
- Equipment, commodities, infrastructure, and real estate
- Enhanced Client Retention & Differentiation
Offering ABF solutions helps wealth managers:
- Provide more holistic, innovative solutions
- Stand out from competitors
- Deepen trust with HNW clients by solving unique liquidity needs
