Private Wealth Frequently Asked Questions

The goal of any investment includes financial gain, but some investment management decisions miss the mark — either gains fall short of expectations or losses occur instead. That possibility defines the risk in investment management. Investments that offer the highest potential gains tend to involve the greatest risk, also referred to as uncertainty or volatility. Investors who can absorb losses without hardship tend to be more tolerant of risk, while others prefer to avoid risk as much as possible. 

Managed investments, more typically called managed accounts or managed funds, represent investments or collections of investments supervised by one or more financial professionals hired by an individual or business entity. In this kind of investment management, professionals take on the legal responsibility and authority to act in the best interests of either a single investor or a group of investors. Managers may buy or sell assets without checking with clients first, but they usually issue regular reports to keep clients aware of how managed investments perform. A popular kind of managed investment is a mutual fund.

In the world of investment management, the term “portfolio” refers either to an array of investments owned by a single entity or to an array of investments administered by a single entity (known as bundled investment or managed funds). Regarding the former definition, a portfolio manager works as a financial professional who handles all of an individual’s investments, evaluating each purchase or sale with the client’s overall goals in mind. By contrast, an investment fund manager handles investments within the bundle on behalf of anyone who buys into the fund as a whole — potentially serving many clients with each transaction but without customization.

Wealth management refers to a more comprehensive array of services — covering not only the purchase, monitoring and withdrawal of investments within a portfolio, but other aspects of a client’s financial dealings and overall financial health. In addition to investment management, wealth management for an individual might include retirement planning and the administration of trusts and estates to minimize taxes, whereas wealth management for a business might include the administration of 401(k), profit-sharing and pension plans.

By definition, investment management assumes responsibility for all strategic decisions made when researching, selecting, monitoring and trading a collection of financial holdings. The goal of investment management is meeting specified financial goals in accordance with the client’s ability and tolerance to assume risk. Investment management firms oversee short-term and long-term financial planning on behalf of a single client, such as an individual or business entity, or for a fund that sells a bundled array of investments to multiple clients. Collectively, an array of holdings or investments makes up a portfolio, which is why some clients refer to investment management as portfolio management.

Wealth management is a financial advisory service for individuals seeking assistance to manage and grow their wealth. Investment banking is a service that helps individuals and companies raise money and free up cash flow.

Investment banking is a broad set of financial services aimed at providing financial capital to businesses, facilitating mergers and acquisitions and helping shareholders of private companies to monetize or sell liquid ownership stakes. Asset management then provides the professional management of the liquidity created by business sale proceeds in constructing a portfolio of financial securities to meet specified financial objectives and income needs.

1. Create a budget. This will help lay a foundation to guide all future financial planning. 
2. Ensure your financial plan accounts for all applicable taxes on your cash flow. 
3. Set aside money for an emergency fund. Reserve money for emergencies that could arise before and during retirement. This could help cover car repairs, home maintenance and medical treatment.
4. Invest beyond your 401(k). Set aside a separate banking account for savings. Consider a Roth IRA. 
5. Manage your debt so you can retire debt-free., so that upon retirement you are starting with a clean balance.

1. Pay off debt. Completely pay off all credit card or hospital debt. This will free up money to place in your emergency fund. 
2. Create a plan for investment. It should include planning for your 401(k), IRA and any separate accounts that can help build savings.  
3. Create a retirement plan. Identify how you want to live in retirement. Include budgeting for travel and other bucket-list goals, along with other expenses like health care and emergency costs. 
4. Develop your tax plan. Figure out how you plan to pay for taxes on the money accrued in your 401(k) and IRA. Planning ahead on this can ensure you don’t have any large lump sum bills due as you enter retirement. 
5. Create a plan for your home. Allocate money so that your home mortgage is completely paid off by the time you retire. Ensure you have money set aside for any home repairs, property taxes and other maintenance and ownership costs.

The private banking relationship offered to qualifying clients extends a multitude of exclusive benefits. Private banking clients receive dedicated financial guidance and expertise for their overall personal balance sheet, exclusive cash management products, customized financing solutions and specialized mortgage options.