Asset and Wealth Management

Asset managers invest other people's money for a fee, usually a percentage of the assets they manage; wealth managers advise people on what to do with their money, and usually also charge a percentage of assets. Both businesses are paid on stock, not flow, so their revenue rises and falls with markets as much as with skill. Global assets under management reached about $147 trillion in 2025 (BCG Global Asset Management Report 2026, reported), but industry profit margins have been roughly flat at about 30% since 2010 because fees have fallen almost as fast as assets have grown. The defining shift of the past fifty years is from active stock-picking to low-cost index funds: Vanguard's first index fund in 1975, the first US ETF in 1993, and passive funds holding more US fund assets than active funds from the mid-2020s (Morningstar, reported). The second shift is happening now: the large private-markets firms (Blackstone, Apollo, KKR, Brookfield) are selling private equity, private credit and real estate to wealthy individuals and, through 2025–26 rule changes, to 401(k) savers. This section explains how asset and wealth managers make money, active vs passive and fee compression, ETFs, hedge funds, wealth platforms and advice models, the private-markets push, and the US retirement system (401(k)s, IRAs and state auto-IRAs) that supplies most of the assets. A worked example computes the cost of fees to an investor over 30 years, a hedge-fund fee path and a manager's operating leverage; a checklist sets out how to analyze a manager or a wealth platform.