What is the Wealth Management Industry?

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  • Written By: Keith Koons
  • Edited By: Lauren Fritsky
  • Last Modified Date: 14 August 2019
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The wealth management industry is a compilation of business types that focus on financial planning and investment portfolios. This industry caters to clients ranging from small families to wealthy individuals and it assists in banking, tax accounting, and investments on the private and corporate levels. It also helps clientele manage the distribution of finances in the stock market. These services are provided by banks, professional trust companies, and brokerage firms, and an individual working within this industry is normally a certified financial planner that has obtained a master’s of business administration degree (MBA). Any professional with the credentials to manage money would be considered a part of the wealth management industry, however, so there are many separate paths into this field.

One specific type of bank that caters to the wealth management industry is an investment bank. The banking industry provides a forum for financial holding and investment by connecting the clients who have a capital insufficiency with those who have excess resources, creating opportunities for both parties to optimize their profits. Investment banks also provide stability in the sale of stocks and bonds and money market accounts and provide advice to corporations & individuals on mergers, acquisitions, and major buyouts. The major difference between investment banks and commercial or retail banks is that they do not accept deposits.


Another large part of the wealth management industry is tax accounting. This area of the financial world concerns itself with the preparation of financial statements for small business, high-net worth individuals, and large corporations. Essentially, this important process compiles the financial data needed to manage the taxation of finances and also publish an annual report for the benefit of potential customers and investors. It is necessary to maintain these checks and balances for the procurement of further growth of a financial portfolio.

Beyond the banking and tax management sectors of the wealth management industry lies a complex world of investments. This area of finance includes the stock market, real estate, and corporate holdings as well as many other investment channels. Companies that manage these investments provide a secure and professionally-controlled way to invest in markets where they can potentially increase a client’s net worth.

The importance of these parts of the wealth management industry is that they help reveal investment opportunities to people that otherwise would not have the means to gain firsthand knowledge of them. In return, these investments provide the capital necessary to move forward with the progress of a new idea or the growth of an existing foundation. Another reason that these types of services are necessary is that they are ultimately designed to benefit all parties involved, meaning that in many situations, the financial institution, lender, and borrower all profit in the long term because of the transaction.


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