What Are the Differences Between Investment Banking And Wealth Management?

What Is Wealth Management?

What Is Investment Banking?

What Is the Difference Between Investment Banking and Wealth Management?

Here are the top points of difference between investment banking and wealth management:

Points of Differences

Investment Banking

Wealth Management

Meaning and Objective

It is a financial service that aims to offer facilities to raise capital and transaction handling for government and other institutional clients

Aims to offer financial services to clients to manage their wealth and assets

Services Provided

Mergers and acquisitions (M&A), underwriting, sales and trading, corporate reorganisations, equity research, commercial and retail banking

Retirement planning, investment management, tax planning, estate planning, business planning, education planning, philanthropic planning, insurance services, debt management, and asset preservation.

Types of Organisation

Investment banking firm, banks

Financial management institutions, wealth management firms, banks

Objectives

Facilitating and executing transactions, financing, and offering financial advice

Creating and preserving wealth

Profile of Clients

Government, private corporations, institutional investors

Individuals and families with a high net worth

Types of Compensation

Service fees, charges from deals, and commissions

AUM fees, performance-based fees, retainer fees

How Does Wealth Management Work?

How Does Investment Banking Work?

Investment Banking vs Wealth Management - Which Is Right For You?

FAQs About Investment Banking and Wealth Management

Is investment banking more lucrative than wealth management? up-arrow

Yes, investment banking is generally considered more lucrative than wealth management due to higher salaries and bonuses. However, the workload is also much higher and demands a lot of responsibility and accountability.

Can you change from wealth management to investment banking? up-arrow

While it is possible to transition from wealth management to investment banking, it is not common. Investment banks typically prefer candidates with a strong finance or business background.

Do investment bankers work with individuals? up-arrow

Investment bankers primarily work with corporations and other entities, not individuals. However, some investment banks have a wealth management division that serves high-net-worth individuals.

What qualifications are necessary for a career in investment banking or wealth management? up-arrow

Investment banking often requires a good academic education in finance, economics, or business and prior financial sector experience. Similar qualifications are required for wealth management but focusing on working with individual investors and managing their money.