Wealth Management and Investment Management are two terms that are often confused and even interchanged by many people. In general, money management is crucial in ensuring you get rewards from your investments or career. It is what will determine whether you will have a decent retirement or a mediocre one. You can go about it with the help of Charles R. Green & Associates, Inc., who will take time to study your financial situation before settling on the best strategy. All in all, you must familiarize yourself with standard services used to manage your money.
The most common services to manage your money are through wealth and investment management. However, as much as these services sound similar, there are distinctive details that differentiate them. Here is a detailed description of the two services and what differentiates them:
When you decide to look into your financial situation and try to determine how it will benefit you in the long-term effect, you manage your wealth. Therefore, wealth management is the art of studying your financial situation, considering all financial planning aspects. Wealth management uses a consultative approach as a wealth manager looks into your financial situation and uses that to protect your wealth in the future.
Among the ways you can maximize and manage your wealth are tax planning, legacy planning, estate planning, insurance, and retirement planning. A wealth manager helps you maximize this while protecting it down the line through their services. Additionally, a wealth manager will help you develop a long-term strategy and further use this to implement your long-term goals.
Investment management is the art of managing and investing your assets to help in a long-term return. An investment manager helps by assessing your assets before choosing a portfolio that is appropriate for you. Investment management can be done for an individual or institutional investors like pension funds or insurance companies. To oversee your assets, an investment manager will suggest an investment strategy. These strategies often include advising you on what to buy, what to sell, and what to hold.
It is also important to note that investment management is also an art of financial planning for the client. An investment manager provides holistic advice for you as a client and can also help in cash-flow management. To invest and manage your accounts, an investment manager will need you to set up an investment account or a brokerage account. It is through this they can handle your assets based on your savings and long-term goals.
The two services are often seen to be similar, but there are distinctive features that differentiate them. Here is what differentiates wealth management from investment management;
- Wealth management involves assessing your financial situation and maximizing it to fit your long-term goals. In contrast, investment management consists of managing your assets by investing them in a bid to match your long-term goal.
- Wealth management dwells in using an integrated approach in managing a client’s wealth. In contrast, investment management uses a consultative approach in that an investment manager will take time to study your assets and use that to help you manage them.
- The nature of their clientele also differentiates the two services used in money management. Wealth management is mostly used by high net worth individuals, while investment management is available for everyone, not considering your financial status.
- Wealth management involves a wealth manager developing a tailored plan that will help you maximize your earnings. In contrast, investment management consists of an investment manager studying your financial situation and advising you on products to add to your portfolio to help manage your finances. One service is maximizing your earnings, while the other manages your finances by selling and buying products like bonds.
- Wealth management mainly involves growing your wealth through legacy or tax planning. In contrast, investment management consists of an investment manager trading your investments on your behalf and rebalancing them to fit a specific portfolio.
- Solutions used in wealth management are entirely different from those used in investment management. Wealth management uses tax services, tax planning, legal planning, real estate planning, among others. However, investment management uses solutions like trading and rebalancing your portfolio.
Wealth management is much more than investment management. While one is mainly focused on your investments, the other has a broader approach in studying your financial status and maximizing them to fit your long-term financial goals. Wealth management has a comprehensive approach when compared to investment management. On the whole, both services are beneficial in helping you plan for your long-term goals while managing your financial status. You can begin by reaching out to a financial expert and explore your options.