The difference between wealth management and investment management can seem insignificant. However, there are vital disparities.
In general, you should think of wealth management as a broader general approach to financial management. A wealth manager or financial advisor (sometimes called a consultant) will help with the overall economic picture for clients. Those services go beyond portfolio management. They include things like: retirement planning, tax services, general accounting assistance, some estate planning, philanthropy advice, and investment management.
Wealth management services are appropriate for virtually anyone who wants to get a good handle on their current financial picture and start planning for the future. A wealth manager can also help you set financial goals for the future, take full advantage of your investment options to grow your wealth, and a lot more.
Investment management is a subset of wealth management. It focuses almost exclusively on assets, instead of someone’s overall financial picture and planning. A broker or an advisor usually handles investment management—and wealth management advisors can also do investment management and planning as well.
An investment manager will help create financial portfolios for their clients. They will purchase and sell various assets on a client’s behalf, and they suggest which investments might a good option for a specific client. Most deal with securities like stocks, bonds, and mutual funds, but some will also manage real estate portfolios as well.
An asset manager will examine your risk tolerance, make recommendations about investments, and help you purchase and hold those investments. Unlike a wealth manager, however, they focus exclusively on your assets—they may not offer advice to help with taxes, general accounting, estate planning, charitable giving, or retirement planning. While you can discuss overall investment goals with your investment manager, their interest in your overall financial picture is much more limited.
An investment manager can also work with your wealth manager in some situations. Those two professionals can give your investments extensive attention, so your money continues to work for you.
Rani Jarkas, the founder of Cedrus Investments and a highly experienced and accomplished financial services executive, has a wide network of offices in Hong Kong, Shanghai, Beijing, Shenzhen, Jakarta and New York. Rani Jarkas Firm renders quality, customized, complete suite of strategic advisory and investment banking services to innovative and emerging technology companies worldwide.
