What is Wealth Management and Investment Planning?

Wealth Management is a specialised form of financial service that combines financial and investment advice, accounting and tax services, retirement planning, and, in some cases, legal or estate planning. It is a holistic approach to handling an individual's or family's financial situation.

Investment Planning, on the other hand, is a component of wealth management that focuses on helping investors identify, prioritise, and achieve their financial goals. It ensures that investments are aligned with the individual's objectives, risk tolerance, and future requirements.

Types

Personal Wealth Management: Designed for high-net-worth individuals, dedicated wealth management firms or divisions of larger financial institutions often offer this service.

Small Business Wealth Management: Tailored for business owners, addressing their unique needs such as business succession planning, asset protection, and more.

Online Wealth Management (Robo-advisors): Digital platforms offering automated, algorithm-driven wealth management advice with minimal human intervention.

Investment Consultancy: Focuses purely on advising clients on their investment portfolios without the broader services wealth management offers.

Different Aspects

Asset Allocation: Designed for high-net-worth individuals, dedicated wealth management firms or divisions of larger financial institutions often offer this service.

Tax Efficiency Planning: Tailored for business owners, addressing their unique needs such as business succession planning, asset protection, and more.

Retirement Strategies: Assisting clients in understanding how much they need to save and the best investment vehicles to meet their retirement goals.

Investment Consultancy: Identifying potential risks and recommending appropriate insurance products.

Risk Management: Assisting with transferring wealth to younger generations or charitable causes.

Who Requires It?

With significant assets, High-net-worth Individuals (HNIs) need specialised services to preserve and grow their wealth. Then, Retirees need such services to ensure they can maintain their lifestyle without depleting their savings. Business Owners require such services to protect and grow their personal and business wealth.

Given above are some of the use cases where Investment and wealth Management services are required.

Difference between Comprehensive Financial Planning and Investment & Wealth Management

Comprehensive Financial Planning and Investment & Wealth Management are often used interchangeably in the financial services sector. However, they represent distinct disciplines with objectives, processes, and benefits.

	Comprehensive Financial Planning	Investment & Wealth Management
Scope	A holistic approach that covers all aspects of an individual's or a family's financial life, including but not limited to savings, investments, insurance, estate planning, retirement, and tax considerations	Concentrates primarily on investing and growing the wealth of clients. While it includes financial planning elements, it's more about selecting the right investment vehicles to maximise returns.
Focus	The primary objective is to help clients define and achieve their short-term and long-term financial goals. The planner reviews the client's financial situation and offers strategies tailored to individual needs and objectives.	This service aims to preserve and grow the client's wealth. Advisors in this field evaluate investment opportunities based on the client's risk appetite, time horizon, and financial objectives and craft an investment portfolio accordingly.
Scope	A holistic approach that covers all aspects of an individual's or a family's financial life, including but not limited to savings, investments, insurance, estate planning, retirement, and tax considerations	Concentrates primarily on investing and growing the wealth of clients. While it includes financial planning elements, it's more about selecting the right investment vehicles to maximise returns.
Service Delivery	Involves a step-by-step process, beginning with an in-depth discussion about goals, followed by data collection, analysis, strategy development, and periodic reviews. Recommendations include budget adjustments, debt reduction strategies, or insurance coverages.	Primarily centres around asset allocation, portfolio construction, and ongoing investment management. The process may begin with an initial financial planning review, but the primary service is portfolio management and investment advice.
Client Engagement	Engagements are often project-based or ongoing, with regular check-ins to review and adjust the financial plan as life changes.	The engagement is continuous as wealth managers usually have discretionary authority to make investment decisions on behalf of their clients, requiring ongoing trust and interaction.
Compensation	Financial planners might charge hourly rates, flat fees for a specific project, or annual retainer fees for ongoing advice.	Compensation often comes as a percentage of assets under management (AUM). Some wealth managers might also earn commissions on products they sell.
Tools and Techniques	Utilises various tools like budget spreadsheets, retirement calculators, insurance needs assessments, and more.	Focuses more on investment analysis tools, portfolio management software, and market research.

Comprehensive Financial Planning and Investment & Wealth Management are often used interchangeably in the financial services sector. However, they represent distinct disciplines with objectives, processes, and benefits.