The financial sector presents many career opportunities with the two top careers being Investment banking and asset management. Often times, people tend to mix up the two or believe they mean the same thing; however, they are very distinct in functionality and job roles. Nevertheless, both careers deal with handling money, if you are considering taking a career in the financial sector, you will be able to distinguish and correctly understand the role of each one at the end of the article.
What is Investment Banking? Investment banking is a segment of the financial field, which helps and offers financial services to corporate bodies and other financial circumstances, which include hostile takeovers, acquisitions, and mergers. Investment bankers may also manage short-term investments for their clients, and negotiate multi-faceted deals for the client. As expected, an investment banker must understand the factors that control the success and failure of a business and also be able to critically evaluate the company in a specific industry.
Similar to the market analyst, who is considered the most suitable for assessing stocks, Investment bankers must also be able to evaluate a business, based on the responsibilities assigned to an investment banker. They can be subcategorised into two, the account manager and the operation specialists.
The account manager works to advance and maintain the relationship with clients and ensure that all their needs are duly satisfied while the operation specialist deals with mainly executing all investment banking services.
What is wealth management? Wealth management deals with main individuals with high net worth. A wealth manager provides wealth management services to the wealthy. Mostly, a wealth manager handles one client at a time providing financial assistance, which entails an investment plan, money management, tax planning, estate planning, and retirement planning. However, for clients with ultra-high net worth, the service of more than one wealth manager might be required, but they must work hand in hand towards achieving the same goals. The wealth management field can be subcategorised into two relationship managers and investment professionals. A relationship manager is enforced with the task to get to know the clients they work with to ensure proper working relationships while the investment professional is tasked with the responsibility to search for investment that is considered by and for the clients.
What is the difference between Investment banking and wealth management?
- Investment bankers mostly focus on corporate clients while wealth managers deal with one client at a time.
- Investment bankers work for more hours than wealth managers due to the volume of clients they have to attend too and the full range of service they provide.
- The paycheque for investment bankers is higher than that of the wealthy bankers.
In a nutshell, the central role of an investment banker is to create financial capital for clients through Initial Public Offerings (IPO), mergers, and acquisitions, stock purchases, and other viable means and ensuring that the generated capital is available to clients in need of the money. Wealth management, on the other hand, deals with handling and managing other people’s money majorly individuals with a high and ultra-high net worth.
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