Chapter 6 – Asset Management, Wealth Management, and Research
Q1. What is the difference between asset management and wealth management?
A. AM provides fund investment services to individuals, families and institutional
investors. Assets are managed on a fund level. WM provides specialized services
to meet the wealth planning, investing and financial management needs of
Q2. Why would a wealth manager choose to allocate some of a client’s asset to another
bank?
A. The funds offered by the other bank’s AM division may be&er fit the client’s
Q3. How are the different functions of the sell-side versus the buy-side manifested
through their fee structures?
A. Sell-side has an intermediary/facilitator role- fees are on a commission basis.
Buy-side’s role is to help clients grow their assets, and so, fees are based on
Q4. What drove the need to separate research and investment banking?
A. conflict of interest – Investment banking, a much larger revenue area, was
pressing research to alter its investment opinions to help banking secure M&A
Q5. How have the U.S. enforcement actions against sell-side research in 2003 heightened
the issue of declining research revenues?
A. M&A and financing revenues historically helped to justify costs of maintaining a
large research department. Now that the investment banking side is separated
Q6. What are the objectives of Regulation FD? What are the concerns about this
U.S.-based regulation?
A. The objective is to level the playing field between small and large investors by
providing stock-moving information simultaneously to all investors. A concern is