How do asset management firms operate and how do they make money? (Like BlackRock or Vanguard)

Question

What does it mean to manage assets? What is the role of an asset manager and what is the benefit to the client company?

In: 5

Answer 1

They charge a fee on assets managed… typically around 0.5 or 1% of assets annually. Manage a $1B fund, and that’s $5-10m in fees. Vanguard has $7T under management in total.