Difference Between Investment Management and Wealth Management

Investment Management vs Wealth Management
 

The key difference between investment management and wealth management is that investment Management is a generic term for professional asset management, especially for securities including shares and bonds, whereas wealth management is a broad area that involves investment management as a part of it. Investment Management basically deals with buying and selling of securities in a manner that brings optimum benefits for the investors. In contrast, wealth management is a type of professional service that brings a combination of services such as investment advice, financial and tax services, legal and estate planning services for the organizational or personal betterment. There are significant differences between investment management and wealth management, but the key difference is in the level of financial services provided by each scheme.

What is Investment Management?

People make investments in various tools with the intention of meeting various investment goals such as gaining profits and benefits. Investment management is a professional service that involves in providing advices for buying and selling of securities such as bonds, shares, real estate, etc. for the individual and institutional investors such as pension funds, insurance companies, corporations, etc. The services provided under investment management include different activities such as analysis of financial statements, selection of stocks or assets, implementing investment plans and ongoing monitoring of the investments.

What is Wealth Management?

Wealth Management is a type of service provided by wealth management professionals that is something beyond the investment management. Other than providing investment advisory services, wealth management deals with different services to their clients including coordinating retail banking, estate planning, financial and tax services, legal resources, etc. for one fee.

When comparing these two concepts, one can see some similarities between Investment Management and Wealth Management. The key purposes of both concepts are to provide advice to obtain optimum benefits from the investment or otherwise to their clients.

What is the difference between Investment Management and Wealth Management?

• In Investment Management level of financial services provided is limited only for investment, portfolio or asset management. Wealth Management provides comprehensive financial planning services covering all the related areas including investment management.

• The main aim of Investment Management is to optimize financial profitability generated from the investments. The main aim of Wealth Management is to maximize net worth of the clients.

• In Investment Management the relationship between the service provider and the client is limited. In Wealth Management there is a strong relationship between two parties, the wealth management team and the client that values needs and priorities of the client.

• In Investment Management the range of services provided by is limited to the financial aspect. In Wealth Management the range of services provided covers financial as well as lifestyle aspects of the clients.

Investment Management vs Wealth Management Summary

Investment Management and Wealth Management are two types of professional service providers. Under investment management, the professionals provide investment advisory services for buying and selling of various securities. On the other hand, in wealth management the service providers are liable to provide a range of services such as financial and tax services, legal and estate planning services other than investment advisory. Therefore, the level of services provided for their client is different, where investment management considers only on investment aspects, while wealth management considers all the activities that create wealth for a particular individual.