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Wealth Management

Everyone knows that you need to save and invest for the future to ensure that you have plenty of money for retirement and hopefully enough to pass on to your future beneficiaries. However, managing your wealth can go beyond simply saving and investing. Wealth management firms can help you manage and plan your money and ensure that you have confidence in your future.

What is Wealth Management?

From the individual's viewpoint, wealth management is, in its most basic definition, the process of solving and enhancing your financial situation. From the perspective of a financial advisor, wealth management is the process of consulting with the client and delivering a comprehensive range of financial services and products. This can be done by a single advisor or, in the case of a client with extensive wealth, a wealth manager may put together a team to provide wealth management services.

In theory, a wealth manager would be able to provide any financial product in existence. However, in practice, individual wealth advisors specialize in products and services they are most comfortable with.

How Does Wealth Management Work?

Wealth management advisors and managers use a wide variety of strategies to help their clients, depending on how risk-averse the individual client may be. Wealth managers have access to a broader range of investments and financial packages than the ordinary financial advisor. This could include hedge funds and private equity offerings. A holistic strategy is also preferred. Instead of simple investment management, a wealth manager will put together a financial plan that will include all aspects of the client's life, including tax and estate planning.

Wealth management firms also assess individual goals and risk tolerance. For example, a client nearing retirement will want to simply maintain their wealth, so the wealth manager will start moving money into lower-risk, safer investments. Additionally, clients with very high net worth will need their investments to be diversified, combining low-risk investments to maintain the bulk of their wealth with smaller, high-risk investments to potentially grow that wealth.

Do I Need a Wealth Manager?

Wealth management services usually require high account minimums. This would usually begin around the $250,000 mark upwards. To have an entire team of wealth management professionals working for you would require a minimum of around $2 million. Essentially, wealthy management is for the affluent. Regular investment and financial advice services are quite adequate for those with a lower amount of capital. If you think you are in the bracket where you might require wealth management services, you should ask yourself a few basic questions:

  • Do I have a large amount of capital to invest/manage?
  • Is my financial situation complex (think ownership or shares of multiple businesses, an extensive property portfolio)
  • Do I have enough capital and funds to retire in a manner that I am comfortable with?
  • Is my financial situation too complex to deal with as an individual?

If you've answered yes to the first, second and fourth questions and no to the third, it's likely that you do need some form of wealth management.

Is a Wealth Manager Worth it?

Wealth managers can assist you with all your needs when planning your finances. This can include managing the tax implications of your business income or setting up a fund for charitable contributions. Financial advisors can also offer you these services, but it will usually be just an "a la carte" basis. For example, if you want to work out your tax obligations, a financial advisor will work with you on that, but only that one facet of your finances.

A wealth manager will offer you an overarching plan to cover every aspect of your financial picture and bring together everything you need to ensure that you maintain and grow your wealth. It is undoubtedly worth considering looking for one if you have substantial wealth.

Wealth Management for You

Managing wealth and finances is a skilled area of expertise, and you shouldn't navigate this alone. Instead, you need to concentrate on what you do best, whether running your businesses, managing your staff, or making sure that your favorite charity is getting everything it needs. So, to get more information on wealth management, or if you want to talk to one of our financial advisors, click here today.

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