What Is the Difference Between Investment and Wealth Management?
In the financial world, there is investment, and there is wealth management. While these two terms sound like they could have similar definitions, this couldn’t be further from the truth.
Read further to understand the difference between Investment Management and Wealth Management.
Investing refers to the process of buying and selling listed and unlisted financial instruments which include bonds, stocks/equities, funds, real estate, or any other asset class.
Wealth management refers to the process of making decisions on the future of your wealth comprehensively. The areas covered by wealth management range from financial planning, right through to the actual execution of your investment plan. It starts with assessment of your personal and financial situation, your current asset base and existing portfolios, your fiscal situation, accounting, retirement plans, and compliance matters.
Based on the analysis the wealth manager is able to provide holistic advice which covers all the above mentioned areas. These services are sought for by wealthier clients with a sizeable asset base requiring efficient and effective management.
How is Investing and Wealth Management Different?
Investing is a decision to deploy your capital in different asset classes. You may decide to start investing in silo or, preferably, you may choose to invest as a part of a bigger investment or wealth management plan. Best practice investing is executing investment decisions according to a clearly defined investment / wealth management plan.
If you decide, as an individual investor, to start investing, you may do so with a very small amount of money that will enable you to put your foot into the door of investing without taking on much risk, however when it comes to wealth management and large amount of wealth, the game completely changes, it is recommended to seek the services of an experienced wealth manager who will assist and guide you through the process whilst mitigating risks around investment decisions.
The Aim of Wealth Management
The aim of wealth management is to achieve coherent growth of a client’s asset base and to ensure that the wealth is passed on to the next generations in a sustainable manner . A competent wealth manager will design and follow a well-structured investment plan that will provide for a smooth transition of wealth whilst expanding the asset base taking into consideration the risks involved. This process can be complex and perplexing, as there are several different paths that a person can take to attempt to manage their wealth.
Why is it important to Invest? At what point is a Manager required?
Investing is extremely important for achieving returns and growth of your portfolio. In the process of investing you build financial literacy while developing the skills you will need as your wealth grows. An increase in the level of your financial literacy will boost your confidence and convictions while at the same time improving your judgement on risk assessments.
It is important to start investing early and investing with confidence based on a well-defined investment strategy. It is important to build your wealth and a sustainable future for you and your family at every stage of your life and your business.
Once you have scaled up your investments, you may find yourself constantly overwhelmed, which will indicate it is time to hire a wealth manager.
Why Is a Wealth Manager Important?
A wealth manager has an important role to play whilst accompanying wealthy clients to define their investment objectives and is able to provide an independent view on how best to manage a client’s wealth. This is crucial for a person who has a large amount of wealth. A wealth manager will guide you through to optimizing your returns and value of your assets portfolio. When making investment decisions, having a wealth manager by your side will enable you to take a well thought through decision whilst taking into consideration risks and returns proportions.
Building investment and wealth management capacity in Mauritius
When you choose your wealth manager, it is important to seek a qualified professional with relevant experience in the field of investment services. Mauritius’ mature financial industry will provide access to highly qualified professionals who are experienced in wealth and investment management. Mauritius has additional benefits for those who are looking to begin working with rapidly developing African nations, as the country has worked out many deals with neighboring countries for tax breaks and financial incentives that will benefit your business.
Strategia Investment Solutions
Investment and wealth management both lead to the ultimate objective of returns, sustainable capital.The difference mainly arises from the fact that investment management is focussed on the action of executing an investment plan.
Whilst Wealth Management takes into consideration the broader scheme of a client’s wealth. In addition to the returns and growth dimensions, it encompasses other key aspects of your life and business such as, taxation, succession planning, accounting, compliance and asset protection. When appointing a wealth manager, it is crucial to find a manager who has the relevant expertise and knowledge in this field and who will ensure that your interests will be protected.
Strategia Investment Solutions has a team of global experts that can take wealth management to the next level with a great deal of experience in both investment and wealth management.