A Guide to Wealth Management at Any Age

Piggy bank on stacks of money

A Guide to Wealth Management at Any Age

What Is Wealth Management?

Investment advice known as “wealth management” combines a variety of monetary offerings catered specifically to individuals with substantial financial resources. The adviser employs a consultative approach to learn about the client’s needs and circumstances before developing a unique plan that may include many types of financial services.

In wealth management, a comprehensive strategy is often used. Investment counseling, estate planning, accounting, retirement, and tax services are some of the many options available to clients who require help with their complicated financial situations. While the specifics of how much clients pay for wealth management services might vary, fees are often calculated as a percentage of their total assets under management (AUM).

Investment counseling is just one aspect of wealth management. It can encompass all parts of a person’s financial life. It’s possible that high-net-worth people may benefit more from an integrated strategy than from trying to merge bits of advice and different products from several specialists. In this approach, a client’s wealth manager acts as a single point of contact for all of their financial planning and advisory requirements, from estate and trust management to company succession strategies.

Many wealth managers are well-rounded enough to assist with any and all financial matters, while some choose to focus on niches like cross-border asset management. This might be due to the unique skillset of a certain wealth manager or the main concentration of the organization in which the wealth manager is employed.

Piggy bank on stacks of money

What Does A Wealth Manager Do?

When it comes to money, ultra-wealthy individuals often have specific concerns, such as estate tax planning, that wealth managers may be able to help them with. On your behalf, they may coordinate the efforts of other professionals, such as lawyers and accountants. It’s more efficient to hire a wealth manager who can collaborate with many specialists on your behalf.

For the best possible outcome, a wealth management adviser may need to coordinate the input of third-party financial specialists and the client’s own service providers (such as an attorney or accountant). It’s not uncommon for wealth managers to provide other services, such as banking and philanthropy advice.

A wealthy person who has been married and divorced, who owns various homes, and who has numerous assets and accounts to handle may need the services of an expert in the fields of law, property taxation, and financial management, among others. A wealth manager, either alone or in consultation with other professionals, may craft a comprehensive financial strategy that caters to all of these requirements.

What Can Wealth Managers Help You With?

The purpose of wealth management is to assist you in achieving financial stability as well as growing and protecting your money. These are some of the most frequent services provided by wealth management firms:

  • Investment management. A wealth manager will collaborate with you to create an investing plan that is suited to your objectives and risk tolerance. If the manager is a qualified investment adviser, they may also choose and manage investments on your behalf, usually for a charge.
  • Financial planning. A wealth manager may assist you in developing a financial plan that includes objectives for saving, investing, and spending. The manager may also assist you with retirement planning, college savings, and other key life events. These strategies may be evaluated on a regular basis as your circumstances change.
  • Tax advice. A wealth manager may advise you on how to organize your funds to reduce your tax obligation. This is particularly significant if you operate a company or have many sources of income.
  • Estate planning. A financial manager can assist you in creating a plan for what will happen to your assets when you die. This may entail establishing a will or trust and naming beneficiaries.


Wealth Management Example

In general, wealth management offices have a staff of specialists and professionals on hand to give guidance in a variety of industries. Consider a customer who has $2 million in investable assets in addition to a trust for their grandkids and a recently deceased spouse. A wealth management company would not only invest these monies in a discretionary account, but would also offer will and trust services to help with tax services and estate planning.

Wealth management advisers who work directly for an investment company may be more knowledgeable about investing strategy, while those who work for a big bank may be more knowledgeable about trust administration and available credit alternatives, general estate planning, or insurance possibilities. In summary, competence may differ amongst organizations.

Fees for a Wealth Manager

Wealth managers at major corporations may be paid a base salary plus commissions for their work. Advisory fees (often approximately 1%) are paid to the adviser directly if you deal with a private firm that is owned by the advisor. Always inquire about fees before meeting with a possible counselor.

There are a variety of pricing structures available to advisors. Some are fee-only consultants that bill clients on a yearly, hourly, or flat rate basis. Some people are compensated via the investments they sell and work on commission. Compensation for fee-based advisers often consists of both a flat fee and commissions on the investments they recommend.

According to a recent study of financial advisers, the average advice fee (for accounts up to $1 million in assets under management) is little over 1%. However, the fees charged by certain advisers may add up quickly, particularly for those with lower initial investments. The median AUM fee decreases as an investor’s assets grow, so those with bigger balances often pay much less.

Credentials for Wealth Managers

The best specialist for your requirements and circumstances may have a combination of certifications and experience, so it’s important to look into their background before hiring them. Certified Financial Planner, Chartered Financial Analyst, and Personal Financial Specialist are the top three certifications for professional advisors. It is possible to check a member’s status through their professional certification organization’s website and see whether they have been subject to any disciplinary measures or complaints.

The phrase “financial advisor,” which may refer to a wide range of specialists in the financial sector, is not standardized and does not need any kind of professional qualification or licensing. A wealth manager is a kind of financial advisor whose practice is dedicated to serving the needs of the very wealthy. In most cases, the minimum investment with a wealth manager is far larger than that with a standard financial advisor.

As a result, wealth managers often provide a wider range of services than do financial advisors. Estate planning, trust services, family legacy planning, philanthropic contribution planning, and legal planning are all examples of the kinds of services that fall under this category. Even concierge medical services are being offered by certain financial managers.

Professional designations might be confusing, but luckily there is a resource available from FINRA (the Financial Industry Regulatory Authority) that aims to provide clarity for those seeking financial counsel. You may also determine whether the issuing body mandates continuous education, accepts complaints, or allows you to verify who possesses the credentials. Keep in mind that the job title “wealth manager” is simply a generic word that may be used by anybody and indicates no special certification. You should always do your due diligence before hiring any kind of financial advisor. The BrokerCheck database maintained by the Financial Industry Regulatory Authority is a great resource for checking up on a potential advisor.

Is A Wealth Manager Worth It?

A wealth manager’s responsibilities should extend to all aspects of financial planning, such as handling the tax implications of company revenue and establishing a donor-advised fund for charitable giving.

While financial planners and wealth managers may provide comparable services, financial planners often provide their offerings on a “a la carte” basis. For instance, some financial planners may help you construct a retirement income plan if you just want assistance figuring out how you’ll meet your retirement income requirements, and you’ll only pay for that service.

In order to safeguard your wealth for the future, it may be wise to seek expert assistance today with estate planning, tax preparation, or investment guidance.

Do You Need Wealth Management?

You should consider your financial status, your financial objectives, and your level of financial knowledge before deciding whether or not to hire a wealth manager. You may not require the assistance of a wealth manager if you have a firm grasp on your financial objectives and are comfortable selecting the products and techniques that will help you achieve those objectives while keeping your money secure. However, most of the time, this is ill-advised because reputable wealth advisors are trained in managing your money. This training can be thought of through the following example:

Imagine that you as a non-financial planner have credentials to perform first aid. If someone falls and scrapes themselves, you can help with their care because it doesn’t require much – it is uncomplicated. But if a person had a brain aneurism and needed brain surgery, you are not equipped but a neurosurgeon is. A certified wealth manager is your financial neurosurgeon.

A wealth manager can help you make educated choices about your money and give direction if you come into issues you can’t answer or have requirements that would benefit from input from an expert.

If you have other regular consultants, such as an accountant or attorney, ask them if they have any thoughts on whether or not a wealth manager might be helpful for your financial situation.

Let Us Walk With You On Your Wealth Management Journey!

Content provided by Paradox Media.


This information is not intended to substitute for specific individualized tax, legal, or investment planning advice. Neither Royal Alliance Associates nor its representatives or employees provide legal or tax advice. If legal or tax advice or other expert assistance is required, the service of a currently practicing professional should be sought.

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