Wealth management includes the process of gathering financial data, making goals according to the data and auditing and analysing the portfolio. It is followed by proposing a financial plan, implementing that plan and monitoring and reporting the plan.
What is the Difference Between Wealth and Investment Management?
The difference between wealth and investment management might seem inconsiderable. However, they are very important when it comes to financial planning. Knowing the differences between both can help you achieve your financial goals as they work on different levels.
Investment management is more about seeking and making decisions regarding investments, while wealth management looks at the whole division of your finance. In this article, we will discuss what wealth and investment management are, wealth vs investment management and when you need them.
What Is Wealth Management?
What Is Investment Management?
It is the process of making decisions regarding investments. The process involves researching, selecting and monitoring various assets that match your financial goals, risk profile and timeframe.
Invest management includes a wide range of investment opportunities that will help you to grow your wealth from stocks or bonds, real estate and other assets.
What Are the Differences Between Wealth and Investment Management?
The following table shows the difference between wealth and investment management:
The main purpose of wealth management is to maximise your net worth.
The main purpose of investment management is to improve the financial profitability generated from your investments.
It includes managing investments or assets portfolios along with tax planning. This also helps in managing education planning, estate planning, legacy planning, insurance, retirement planning and charitable contribution.
Investment management includes managing investments or assets and analysing past and current data. Furthermore, it covers the management of risk-return analysis, formulation of assets, projection and recognition of suitable assets for you.
The main responsibility of wealth management is that they should put forward your interest before their own.
Its main responsibility is to offer suitable products to you.
Management has a process-driven approach that involves coordinating with financial experts for inputs. They also approach lawyers, insurance agents and other specialists in this field to give you the correct inputs of wealth management.
Investment management has a creative and delicate approach since they provide in-house products. They do it through their financial expertise and direct participation in the market.
Wealth managers are usually registered as investment advisors.
They are registered as broker-dealers.
When Do You Need Wealth Management?
When Do You Need Investment Management?
An investment manager will help you to manage your investment portfolio by collecting all your investments from different sources and merging them into a few accounts. Such accounts are specially customised to meet your financial goal, whether it is short-term or long-term.
Both wealth and investment management have professional managers that will help you identify your financial goals. The role of managers is quite different from each other, and both can add value to your overall financial planning.
What Does a Wealth Manager Do?
The role of a wealth manager is combining the fields of investment management and financial planning to provide you with services like tax planning, retirement and estate planning. A wealth manager obtains the data, evaluates information and makes decisions upon that information.
They also help solve your financial problems and establish an interpersonal relationship with you. A wealth manager assists you in identifying your financial goals and develops a customised strategy, and helps you to execute them.
What Does an Investment Manager Do?
An investment manager's role is investing in research and buying and selling securities daily. They are also involved in planning your finances and monitoring your investment portfolio. First, they analyse your current financial status and set goals according to the status.
Second, based on these goals, they devise tactics and carry out trade within portfolios to give you better returns.
Wealth vs investment management have many differences between them though they look similar. Wealth management is a complete financial management service that helps you manage your finances.
On the other hand, investment management helps you from the investment perspective by offering advice on identifying suitable investment options according to your choices.
FAQs About Wealth and Investment Management: What Are the Main Differences
While selecting an agency for wealth management, you must consider the following things:
The competence and experience of the agency, the durability of the agency in the long run, the resources the agency provides, like different services and products, and the agency's performance.
Quantitative investment refers to techniques that depend on algorithms to examine data such as quality, liquidity and valuations. It then makes trades based on this analysis.
Wealth management is necessary for every individual who wants to have financial stability in their life. It is significant if you have just started your career or saved part of your income.
Other Important Guides About Wealth Management
- This is an informative article provided on 'as is' basis for awareness purpose only and not intended as a professional advice. The content of the article is derived from various open sources across the Internet. Digit Life Insurance is not promoting or recommending any aspect in the article or its correctness. Please verify the information and your requirement before taking any decisions.
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