Basic Difference Between Investment Banking, Asset Management and Wealth Management

Investment banking is one of the oldest forms of investment that the world knows of. History knows that there has been nothing more controversial than global investment banking companies, in the past. Although the nature of investment banking is quite volatile and spontaneous, investment banks have managed to stay astride for these many years, into the modern world, bringing in the wisdom from the past. If you consult any investment banker, you will know the swiftness and the agility needed in the profession. Typically, investment banking companies deal with trading of derivatives, foreign exchange, fixed income, commodity, dealing with mergers and acquisitions, underwriting and so on.

This is a lot more different that asset management. Although some top asset management companies in India do function as investment banking companies too. While investment banking is more spontaneous and requires the investment banker to always be on his or her toes with the ongoing trends, asset management is a little more sorted. In asset management, money is invested in bigger amount and in bigger more stable assets, that will fetch us the returns in long term. An asset manager guides their customer into investing smartly. 

When we talk about wealth management firms, we talk about long term. Wealth is a summation of all the assets that a person owns, that are not always monetary. For example, land, property of various kinds, investment in bonds and shares, investment in some other business and so on. One difference between asset management and wealth management is that asset management focuses on expanding the assets and investment of a customer. While wealth management is about managing the assets and financial aspects of a client. Wealth management basically keeps the financial needs of a customer ahead whereas asset management works more on commission basis.