When Do You Need to Hire a Wealth Manager?

Deciding at what point to hire a wealth manager can have a big impact on your financial well-being. Oftentimes, individuals seek out wealth managers when their financial situation becomes too complex to manage on their own. This could be due to a significant increase in assets following an inheritance, the sale of a business, or substantial investment gains. Some prefer to hire a wealth manager to help with situations such as retirement and estate planning, or to reach specific long-term goals. Wealth managers can provide personalized advice, help create comprehensive and strategic financial plans, and align your investment plan with any long-term goals.

Ready to put together a comprehensive financial plan? Consider reaching out to a financial advisor.

When to Hire a Wealth Manager

You should consider hiring a wealth manager when you have complex financial needs or significant assets that require professional management and strategic planning. They can provide expertise in investment management, tax optimization and estate planning, particularly if you lack the time, expertise or desire to manage these aspects yourself. Additionally, hiring a wealth manager can offer you peace of mind knowing that your financial affairs are handled with a focus on long-term growth and the protection of wealth. Let’s take a look at five general examples of when you could benefit from wealth management advice.

Significant Increase in Assets

One common situation that prompts individuals to hire a wealth manager is a significant increase in assets, such as receiving a large inheritance. Managing newfound wealth can be a daunting task, especially without any professional guidance. For example, inheriting a sizable estate can introduce complex tax considerations and require new investment decisions. A wealth manager may be able to help you address these issues and incorporate the inherited assets into your broader financial plan in a tax-efficient way.

Sale of a Business

Another scenario in which individuals turn to a wealth manager is the sale of a business. Selling a business often comes with specific tax implications, as well as an influx of funds. Those funds will need to be managed so that they retain their value and deliver growth. Wealth managers can walk you through the tax implications and provide expertise in creating a diversified investment portfolio. This helps former business owners transition from managing a company to managing their wealth, thereby maintaining their financial stability and legacy.

Substantial Investment Gains

Investors experiencing substantial gains from their portfolios may also wonder at what point they need a wealth manager. Significant investment success brings tax liabilities and the need for sophisticated investment strategies to sustain and grow wealth. Wealth managers offer advanced financial planning, risk management and personalized investment strategies to help capitalize on market opportunities.

Complex Financial Situations

Wealth managers are also invaluable when dealing with complex financial situations that involve multiple income streams, assets spread across various accounts, or diverse investment vehicles. They can coordinate all aspects of your financial life, including retirement planning, estate planning and charitable giving. Having a wealth manager handle all of these diverse aspects ensures that each one is working optimally to support your financial goals.

Achieving Long-Term Financial Goals

Hiring a wealth manager is not just for immediate financial concerns. It can also help you achieve long-term objectives. Whether preparing for retirement, funding education, or planning a philanthropic legacy, wealth managers provide strategic guidance. They develop comprehensive financial plans tailored to your unique circumstances, helping you achieve these aspirations with confidence and precision.

What Wealth Management Services Typically Cost

Most wealth managers charge an annual fee based on a percentage of the assets they manage for you. The typical range is 1% to 1.25% on the first $1 million, with the rate declining on assets above that level. A client with a $2 million portfolio might pay 1% on the first million and 0.75% on the second, bringing the total annual fee to roughly $17,500 rather than the $20,000 a flat 1% rate would produce.

Many wealth management firms set minimum portfolio requirements for new clients. These minimums often start at $250,000 to $500,000 and can reach $1 million or more at larger firms. If your investable assets fall below a firm’s minimum, you may need to look for advisors who serve a broader range of clients or who offer scaled-down planning services at a lower entry point.

What the fee includes varies from firm to firm. Investment management is almost always covered. Many firms also include financial planning, tax coordination and estate planning guidance as part of the annual fee. However, services like tax return preparation, legal document drafting and insurance placement are often billed separately or handled by outside professionals the firm refers you to. Before signing on, ask for a clear breakdown of what is and is not included so you can evaluate the total cost accurately.

One way to assess whether a wealth management fee is reasonable is to compare it to what you would pay assembling the same services individually. An investment advisor might charge 0.50% to 0.75% for portfolio management alone. A CPA could charge $500 to $3,000 or more annually for tax planning and preparation. An estate planning attorney might bill $2,000 to $5,000 for document drafting and periodic updates. When you add those costs together, a bundled wealth management fee may be comparable or even lower, depending on the complexity of your situation.

The value of the fee also depends on what the wealth manager actually does beyond managing your investments. If the firm is actively coordinating your tax strategy with your investment decisions, reviewing your estate plan as laws and circumstances change, and helping you navigate major financial events, the fee covers a scope of work that goes well beyond picking stocks or rebalancing a portfolio.

Wealth Management Mistakes That Cost More Than the Fee

Receiving a large sum of money and leaving it in cash while you figure out what to do is one of the most common and most expensive mistakes. Whether the source is an inheritance, a business sale or a legal settlement, every month that money sits uninvested is a month of potential growth lost. On a $1 million balance, even a few months of delay during a rising market can represent tens of thousands of dollars in missed returns that cannot be recovered.

Not planning for the tax consequences of a business sale before the transaction closes is another costly error. Strategies like structuring the sale as an installment agreement, directing a portion of the proceeds into a qualified opportunity zone investment or making a charitable contribution in the same tax year can meaningfully reduce the tax bill. Once the sale is complete and the tax year has closed, most of these options are no longer available.

Managing multiple investment accounts without considering how they interact from a tax standpoint leads to unnecessary tax bills. Realizing gains in a taxable brokerage account while simultaneously holding positions with unrealized losses in a separate account means you are paying taxes you could have offset. A wealth manager looking at all your accounts together can identify these opportunities and time transactions to minimize your total tax exposure across the portfolio.

Failing to update estate documents, beneficiary designations and account titling after a major life event is a mistake that does not surface until it is too late to fix. A divorce that is not reflected in your beneficiary designations can result in an ex-spouse inheriting your retirement accounts. A trust that was never funded with retitled assets will not prevent probate. These are administrative details that a wealth manager tracks as part of their ongoing oversight.

Treating investment management as the entirety of what a wealth manager should provide is itself a mistake. The most impactful work often happens in areas the client does not see, like coordinating a Roth conversion with a low-income year, restructuring an estate plan around a change in tax law, or identifying an insurance gap that could expose the family to a catastrophic loss. Evaluating a wealth manager solely on portfolio performance misses the broader value that comprehensive planning is designed to deliver.

How Much Money Do I Need to Hire a Wealth Manager?

There’s no universal minimum required to hire a wealth manager, but many firms set asset thresholds based on the services they provide. Traditional wealth management firms often require between $250,000 and $1 million in investable assets, while some high-net-worth-focused firms may set minimums of $2 million or more.

That said, access to wealth management has expanded. Some advisors work with clients below those thresholds, offering planning services for a flat fee or hourly rate instead of charging a percentage of assets under management. In fact, 35% of advisory teams surveyed by Kitces reported having no minimum account size, while 21% reported minimums of under $500,000. ¹ This can make professional guidance more accessible if you’re still building wealth but have complex financial needs.

Ultimately, the right time to hire a wealth manager depends less on a specific dollar amount and more on the complexity of your financial situation. If you’re managing multiple income streams, planning for taxes or navigating major financial decisions, working with a professional may make sense regardless of your current asset level.

How to Find and Hire a Wealth Manager

Finding the right wealth manager starts with understanding your own needs. Consider what services you’re looking for, such as investment management, tax planning, estate planning or a combination of all three. Having clarity around your goals can help narrow your search.

Define Your Needs

Start by identifying what you want help with and the level of involvement you expect. Some wealth managers offer comprehensive planning, while others focus more heavily on investments. Knowing this upfront can make your search more efficient.

Research Potential Advisors

Once you know what you’re looking for, begin comparing options. You might ask for referrals, search online directories or review local firms. Look for relevant credentials such as CFP® or CFA, and check whether the advisor operates as a fiduciary.

Understand How They’re Paid

Compensation structures can vary. Some wealth managers charge a percentage of assets under management, while others use flat fees or hourly rates. Reviewing fees alongside services can help you evaluate overall value.

Interview and Compare Options

Before making a decision, consider meeting with a few advisors. Ask about their investment approach, communication style and planning process. These conversations can help you determine whether their approach aligns with your expectations and whether you feel comfortable working with them over time.

Bottom Line

A wealth manager can oversee and advise on the comprehensive management of your financial assets, including investment planning, estate planning, tax optimization and risk management. Determining at what point you need a wealth manager hinges on the complexity and size of your financial situation. Significant changes like inheritance, business sales, or investment gains often require professional guidance to manage effectively.

Wealth Management Tips

• If you need help aligning your finances with your goals, a financial advisor may help you create a personalized plan. Finding a financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you vetted financial advisors who serve your area, and you can have a free introductory call with your advisor matches to decide which one you feel is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
• A major step in estate planning is deciding how you want your wishes enforced. The first step is deciding exactly what those wishes should be. With SmartAsset’s estate planning guide, you can decide what should happen after you pass.

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