There is a notable amount of crossover among the various sectors of finance, but it is critical to recognize the underlying differences between each. Wealth management, investment banking, and financial planning each have distinguishing characteristics that may help you understand which is best for you. The most important difference you’ll notice is WHO each sector serves best. Since these sectors have many of the same “Services” offered - it’s more important to understand who those services are for.
What Kind of Products can a Wealth Management Client Invest In?
Wealth management balances risk and reward and not all wealth management products are meant for every investor. Investors must choose between low or high-risk investments, low rewards vs. high rewards, and highly concentrated vs. highly diversified investments.
Wealth management is a clear-cut term with a definition that is unique from financial advising and private banking, but often confused with both. Even professionals that work in the field misinterpret the definitions or use them interchangeably, and that may be because they do have many similarities. Furthermore, wealth managers are different than both accountants and financial advisors and only provide services to 1-3% of the United States population.