Wealth Management Vs Investment Banking

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What Is A Financial Advisor

Investment Banking vs Asset Management

A financial advisor is an expert who helps clients with a wide range of financial services. Advisors typically provide financial planning and investment management. In some instances, advisors might only offer one or the other, though.

However, the term financial advisor is broad and doesnt refer to one specific type of advisor. For example, a certified public accountant is someone who has earned a certification to work with taxes and accounting. Meanwhile, a chartered life underwriter is an expert in the subjects of life insurance and estate planning. In addition, a certified financial planner focuses on building clients financial plans for their future goals.

Some advisors also work with particular clients, such as retirees or business owners. You can get an idea of what specialties an advisor has by looking at his or her certifications and licenses. Learn more about common advisory certifications here.

Investment Banking Versus Wealth Management: Which Pays The Most

by Dan Butcher 03 November 2016

Over the years, many students and recent graduates looking to enter financial services debate whether they should go for investment banking or wealth management. There are also plenty of examples of an investment bankers transitioning to wealth management and vice versa.

There are lot of factors to consider, but, for many, the decision comes down to one thing – compensation. So, which is likely to pay more over the course of a career, investment banking or wealth management?

Wealth Management Focus On Different Areas Of Financial Planning

While asset managers are wholly intent on taking care of a clients investments, wealth managers take a broader look at their entire financial circumstances in order to optimize their money in a way that achieves individual goals in the long run.

Wealth management is more than just investment advice: It can encompass all parts of a persons financial life. It does include asset management, but it also includes a lot more than that. It takes a more holistic approach to asset management and ties it with other goals, such as retirement goals, short and long-term financial goals.

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Portfolio Management Vs Investment Banking

Portfolio Management refers to the management of the portfolio of assets of the client whereas, investment banking refers to the various different type of function performed by the investment banker in the economy by offering different financial services to their clients by mainly dealing in the purchase and sale of the stock and helping in raising the capital.

What Is Private Banking

Wealth Management Versus Investment Banking

In the simplest terms, private banking is like normal banking but with more money. While most retail bank accounts can be opened with loose change, private banking clients are required to possess a sizeable amount of wealth.

How much wealth varies from one bank to the next but generally speaking, the benchmark is a six-figure sum in cash or seven figures in assets. While the products that a private bank provides do not differ greatly from that of a retail bank , a more personalised and dedicated level of service is provided.

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Private Banking vs Wealth Management

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Whats The Difference Between The Buy Side Vs Sell Side

Buy-Side vs Sell Side. The Buy SideBuy-SideInstitutional asset managers, known as the Buy Side offer a wide range of jobs including private equity, portfolio management, research. Learn about the job refers to firms that purchase securities and includes investment managers, pension funds, and hedge funds. The Sell-SideBanking CareersThe banks, also known as Dealers or collectively as the Sell-Side, offer a wide range of roles like investment banking, equity research, sales & trading refers to firms that issue, sell, or trade securities, and includes investment banks, advisory firms, and corporations. Sell-Side firms have far more opportunities for aspiring analysts than Buy-Side firms usually have, largely due to the sales nature of their business.

When talking about investment banking, it is important to know the difference between the buy-side and the sell-side. These two sides make up the full picture, the ins and outs of the financial market, and both are indispensable to each other:

  • Buy-Side is the side of the financial market that buys and invests large portions of securities for the purpose of money or fund management.
  • Sell-Side is the other side of the financial market, which deals with the creation, promotion, and selling of traded securities to the public.

Corporate Finance FundamentalsThis free Introduction to Corporate Finance Course is perfect for anyone in or starting a career in investment banking, equity research, and accounting.

Difference #: When It Becomes About Sales

As briefly touched on before, investment banking really does become more or less a sales job as you reach the managing director level. You are no longer plugging and chugging in Excel. Rather you are coming up with ideas, pitching them to clients, and hoping to entice one of them to actually act on your idea.

By contrast, in wealth management, your role is fundamentally a sales role from the get go. You’re pitching potential clients from day one, coming up with ideas to help them, and at some firms doing the classic “smile and dial”.

The reality is, you shouldn’t plan on a long career in either industry if sales isn’t something you’re interested in. However, you can do investment banking at the analyst or associate level, which is more analytical and involving no sales, and then move to a hedge fund analyst role or something analogous that likewise involves no real sales.

However, I would caution that sales is a skill set. Even in an analytical role, like being a hedge fund analyst, you still need to sell your ideas to your portfolio manager to have them executed. In just about any job, there will be someone you need to convince in order to do what it is you want to do.

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Product And Service Quality

 

Finally, let’s look at product and service quality.

Wealth managers are experts in their overall business but not always entirely specialized in everything they offer.

The above services require boutique specialization to achieve the best results for your wealth.

To a certain extent, the industrial and necessarily standardized wealth management approach may not be tailored to your needs but rather tailor them to the offered services.

This means that you will inevitably have to compromise on the ideal outcome for individual wealth management requirements, not to mention that you don’t get tax and legal advice.

Therefore, it’s essential to remain critical of quality, conflict of interests, and dependencies.

Main Differences Between Investment Banking And Asset Management

Investment Banking vs Asset Management | Know the Top Differences!
  • The former works on the selling side, whereas asset management is more inclined towards buying and managing money and other assets.
  • An investment banker does the job of selling the products and services. On the other hand, an asset manager is known for buying and managing the same on behalf of others.
  • Good sales skills are something that is mandatory in the field of investment banking, whereas asset management majorly focuses on quantitative aptitude and analytics.
  • Raising capital is the job of an investment banker. On the other hand, managing the financial and physical assets is the job done by an asset manager.
  • An investment banker works for the sales department of a bank, but an asset manager is bound to work as technical support.
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    Role Of The Sell Side Vs Buy Side

    There are some major differences between the sell-side vs buy-side in the capital markets. The main differences come down to the role each side plays for their client and the personality types that do well on each side.

    The Role of the Sell Side:

    • Advise corporate clients on major transactions
    • Facilitate raising capital, including debt and equity
    • Advise on mergers and acquisitions
    • Win new business
    • Create liquidity for listed securities
    • Help clients get in and out of positions
    • Provide equity research coverage of listed companies
    • Perform financial modeling and valuation

    The Role of the Buy Side:

    • Manage their clients money
    • Make investment decisions
    • Earn the best risk-adjusted return on capital
    • Perform in-house research on investment opportunities
    • Perform financial modeling and valuation
    • Find investors and recruit capital to manage
    • Grow assets under management

    To learn more about the differences between the buy-side vs sell-side check out our free introduction to corporate finance courseCorporate Finance FundamentalsThis free Introduction to Corporate Finance Course is perfect for anyone in or starting a career in investment banking, equity research, and accounting.!

    Investment Banking Vs Asset Management

    The main difference between investment banking and asset management is that the former works on the selling side, whereas asset management works on the buying side. While investment banking sells products and services related to finance, asset management buys the same. It shows that both these sectors are opposite to each other.

    Investment Banking is the sector of a bank that sells services like capital raising, mergers, and acquisitions to the government and corporate institutions as an advisory. In short, these banks are intermediates between a corporation and an investor. Corporations require an investment to grow in the market, whereas investors are the ones who invest in them.

    Asset management is often considered a subordinate of investment management. It reflects as the backbone of business markets and other public support infrastructure. Asset management includes all the parts of physical as well as financial, and human capital assets.

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    The Importance Of External Asset Management

     

    Switzerland is home to more than 2000 external asset managers with over CHF 500 billion assets under management. That’s an impressive number compared to other global financial centers.

    According to the Asian Private Banker and Julius Bär 2018 IAM Report: Asia-Pacific Ready for Take-Off?, Hong Kong and Singapore had a total of 160 independent asset management firms and collectively managed USD 91.5 billion in private wealth.

    However, numbers should have increased significantly in the meantime since the Asian sector is rapidly expanding.

    What Is A Sell

    Private banking vs wealth management: what

    A sell-side analystBanking CareersThe banks, also known as Dealers or collectively as the Sell-Side, offer a wide range of roles like investment banking, equity research, sales & trading is an analyst who works in investment banking, equity research, commercial banking, corporate banking, or sales and trading.

    For more information on Sell-Side AnalystsBanking CareersThe banks, also known as Dealers or collectively as the Sell-Side, offer a wide range of roles like investment banking, equity research, sales & trading, please visit our Career Map and explore the many opportunities related to the Sell Side.

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    Asset/wealth Management Vs Corporate Banking

    Hi everyone!

    I am a college senior at a non-target. This summer I interned at a BB in the corporate and investment banking division, and have a full-time return offer for next year. My ultimate goal is to end up in asset management/wealth management. I have the following two options:

    1. Accept the BB offer, work for 2-3 years, then head for a masters for a possible career switch to asset management/wealth management

    2. Reject the BB offer and head for a masters straight out of undergrad, and then try to break into AM/WM

    While I did enjoy my summer stint, I can’t imaging myself doing banking forever. What would you all suggest? Which option would make it easier to get into AM/WM? If I go with option 2, would I be a fool to turn down a BB offer especially coming from a non-target background? Anything else that you believe I should consider while weighing my options?

    Please help, thanks.

    The Takeaway On Investment Banking And Asset Management

    As the underlying structure of finance continues to change in favor of technologies like artificial intelligence, quantitative finance, data analysis, and robotics, among other emerging trends, the investment banking and asset management professions are changing, as well.

    Yes, human capital still is highly valued on Wall Street, but down the road, it’s the money managers, brokers, traders, analysts and fintech specialists who’ll have the best crack at big finance industry salaries.

    And that’s happening faster than many Wall Street professionals may have anticipated.

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    Portfolio Management Vs Investment Banking Primary Tasks Or Roles To Play

    • Portfolio Manager

    You, as a portfolio managerAs A Portfolio ManagerA portfolio manager is a financial market expert who strategically designs investment portfolios.read more, also need to meet your high-value investors or you can connect them over the phone. You also need to make sure that during your work, you need to conduct interviews with media. As portfolio managers, normally you will handle large funds. People who handle small funds are usually called fund managers. So, to handle large funds and to leverage it in the market, you need to do some publicity and at the same time, you need to take responsibility to publicize the firm which you work for.

    • Investment banking

    Tips For Choosing A Financial Advisor

    Investment Banking vs. Management Consulting (Thoughts From A Former Banker & Consultant!)
    • People who work with financial advisors report greater financial security. In fact, research suggests that working with an advisor can result in additional annual investment returns. To help you find local financial advisors, SmartAssets free tool matches you with advisors in your area in just five minutes. Get started now.
    • After you narrow down your search to a few advisors, you should contact them to see which is best for you. In addition to their fees and account minimums, here are some questions to ask a financial advisor before you make a final decision.

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    How Do The Buy Side And Sell Side Earn A Profit

    Buy-side companies make money by buying low and selling high trade activities. They have to create value by identifying and buying underpriced securities. For instance, a buy-side analyst who is monitoring the price of a technology stock observes a drop in the price, as compared to other stocks, yet the tech companys performance is still high. The analyst may then make an assumption that the tech stocks price will increase in the near future. Based on the analysts research, the buy-side firm will make a buy recommendation to its clients.

    Sell-side firms earn their way through fees and commissions. Therefore, their main goal is to make as many deals as possible. The market makers are a compelling force on the sell side of the financial market. They engage in foreign exchange markets by buying and selling a substantial volume of currencies, underwriting and managing bond issues bought directly from the US Treasury, dominating the stock market via underwriting stock issuance, taking proprietary positions, and selling to both companies and individual investors.

    Comparison Table Between Investment Banking And Asset Management

    Parameters of Comparison
    The main job done by an investment banker is to raise capital on a regular basis. Asset managers work in the field of managing money and assets.
    Skills and work culture An Investment banker should have good selling skills. Also, they are required to work 80-90 hours a week. They work more towards technical support rather than working on the selling part.

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    Investment Banking Vs Investment Management: An Overview

    Plenty of undergraduate finance majors and master of business administration students consider pursuing a career in investment banking or investment management, two intensely competitive fields in the finance industry, after receiving their degrees. These professions offer some of the highest starting salaries in the field, and there’s plenty of room for growth for those who are talented and ambitious enough to land one of these spots.

    If you take away all of the industry terminologies and boil these jobs down to their basic elements, investment bankers and investment managers are primarily responsible for channeling money from investors to companies that need capital. Some of the top experts in the investment world can be found in these positions.

    Investment management is all about investment decisions and asset allocation. This means coming up with investment strategies and directing funds to property, equities, or debt securities on behalf of clients. Investment bankers, by contrast, are deal-makers. They work as high-level consultants and analysts for large companies to help with capital raising strategies.

    What Is An Investment Bank

    Wealth Management Versus Investment Banking

    In a word, an investment bank is a financial services company that engages in more high-level, high-complexity financial activities. These activities include underwriting new stock issues, being the middleman between publicly-traded companies and the investing public, advising larger institutional clients on investment options, and helping companies steer mergers and acquisitions from concept to reality.

    The list of high-profile investment banks is familiar to anyone who follows the financial markets. Goldman Sachs – Get Goldman Sachs Group, Inc. Report , JP Morgan Chase – Get JPMorgan Chase & Co. Report , Citigroup – Get Citigroup Inc. Report , and Bank of America – Get Bank of America Corp Report are emblematic of the gold-standard of U.S.-based investment banks.

    Often, investment banks will provide services geared towards larger financial clients, but still offer Main Street investors retail financial services like banking and investing advice on the side. Barclays – Get Barclays Plc Report and Royal Bank of Scotland – Get Royal Bank of Scotland Group Plc Report are good examples of the “hybrid” investment banking model.

    Here’s how investment bankers like the big boys listed above earn their ample fees.

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    Investment Banking Vs Asset Management Education & Skills

    The education, as well as skills required for both the fields, are the same. Firms look for candidates who have a flair for numbers and have knowledge in business disciplines be it finance, economics, accounting, and investment analysis. Candidates seeking to make a career in investment banking or asset management should be ready for enormously tough competition from graduates from top business schools and universities.

    A degree in MBA along with relevant work experience is a prerequisite for an entry-level position in the firm. Its extremely difficult to get hired by major firms most of which look for strong references from respected professionals in the field. Hence networking plays a major role in breaking through large corporate players, having the right contacts help to give you an advantage amongst others. Since the competition is really stiff most firms also consider internships as an extended application process to skim through the right candidates.

    The skillset sought by companies majorly includes.

    • Strong verbal and written communication skills
    • Analytical and problem-solving skills
    • Negotiation and client service skills
    • Time management and attention to detail
    • Advanced mathematical and technical skills
    • Leadership skills and a go-getter attitude
    • Commercial knowledge and in-depth understanding of the subject

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