Difference Between Investment Banking and Investment Management

What is Investment Management?

Investment management is a profession that entails assisting clients in the management of their assets, including the development and sale of those assets. Investment managers are paid by clients, who might be businesses or individuals, to assist them in managing their investment portfolios. Investment managers can operate for themselves, for an investing business, or for a bank, and they frequently work for multiple clients at once.

Investment managers' tasks often include risk reduction, market analysis, client meetings, financial reporting and forecasting, and assisting clients with portfolio management. Financial expertise, math skills, negotiation skills, communication, decision-making, and analytical thinking are all important abilities for Investment managers to have. Investment management can involve a variety of job pathways, such as:

• Investment manager:

Investment managers are financial experts that advise customers on asset purchases and sales based on financial data, market conditions, and other considerations. Investment managers are in charge of assisting their clients in making the best decisions possible for their portfolios.

• Financial analyst:

Financial analysts analyze financial data, investigate market situations, and make informed decisions about asset purchases and sales based on market conditions.

• Economist:

Economists are financial experts that study market conditions and forecast future outcomes to assist clients in making sound financial decisions.

What is Investment Banking?

Investment banking is a financial job path that include offering investment advice to clients. Investment banks frequently act as go-betweens for clients and markets. Governments, corporations, small firms, and individuals are examples of investment banking clients.

Investment bankers are in charge of counselling clients, developing financial models, doing research, preparing recommendations, and other investment-related responsibilities. Risk management, mergers and acquisitions, and other services are provided by investment bankers. Investment bankers typically hold a bachelor's degree in finance, accounting, business administration, or another related field. Investment banking necessitates the following abilities:

• Financial Knowledge:

To succeed as an investment banker, you must have a strong understanding of finance. Financial arithmetic, accounting, business, economics, and mathematics should all be well-understood by investment bankers.

• Analytical Skills:

Investment bankers must be able to collect and evaluate financial data in order to assist their clients in making the best investment decisions possible.

• Communication Skills:

Investment bankers must be able to communicate financial facts to their clients and generate written financial reports on a regular basis.

Investment Management vs Investment Banking

Investment bankers and Investment managers have certain overlapping obligations, but they also have some distinct responsibilities. Investment bankers advise their customers on investments and transactions such as mergers and acquisitions in general. Investment bankers may also be responsible for:

• Assisting clients in raising cash
• Building financial strategies and models
• Collaborating with other professionals and interacting with clients
• Planning and negotiating transactions, and
• Researching and evaluating market conditions

• Meeting and effectively communicating with clients to discuss assets and strategies
• Assisting clients in organizing and improving portfolios
• Analyzing market trends to identify buying and selling opportunities for clients
• Preparing financial reports and forecasts for clients
• Collaborating with third parties to make the best possible decisions for clients