What is the difference between Person account and Individual account model in Financial services cloud?

Individual Object Model

The individual model is used as a combination of Account and Contact. This is used when you're dealing with Company. Here company information is stored as Account and since a company can have multiple contacts, these information is stored in Contact object. These are most often called as Business Accounts.

Person Account

If you’re doing business with a single person, like a solo contractor or an individual consumer, you use a special account type called a person account. Person accounts are similar to business accounts, but because they’re meant to record information about an individual person, person accounts don’t have their own contacts.

Use Case:

Ideally when you're dealing with individual, person account should be default choice however if its a company then you should follow Individual Object model. This way it will keep your data clean.

By default in Financial Service Cloud, person accounts are enabled. However there are few considerations when dealing with Person Account. Refer this person account link.

Person accounts store information about individual people by combining certain account and contact fields into a single record

Checkout the link for more details and considerations.

https://developer.salesforce.com/docs/atlas.en-us.financial_services_cloud_admin_guide.meta/financial_services_cloud_admin_guide/fsc_admin_person_accounts.htm