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How and When Is Wealth Management Worth It?


Wealth management services are some of the most high-level and comprehensive financial services that exist. While financial planning services can help with individual financial matters, and asset management services typically deal with investments, wealth management can encompass every part of an individual’s finances from taxes to estate planning, to charitable giving and more. But should you pay for wealth management services? This will depend on your specific financial situation, so it’s important to make sure that it fits in with your overall financial plan and goals. If you decide you want wealth management, SmartAsset’s free matching tool can help you find a financial advisor.

What Is Wealth Management?

Wealth management is a comprehensive financial service that not only offers clients investment advice, but also helps with a wide range of financial and financial-adjacent matters that affect different parts of a client’s financial life.

Wealth managers typically develop complex and holistic financial plans that detail information about investing, taxes, charitable giving, estate planning and any other relevant needs or goals. In turn, they typically manage your investments with an eye towards your long-term goals.

Wealth managers also help set, review and update goals, rebalance investment portfolios and assess whether clients need other services to protect their wealth. This could include managing charitable giving, tax liabilities and business plans.

Because of its comprehensive nature, wealth management is typically reserved for individuals who are at least above the high-net-worth threshold. This is generally seen as someone who has at least $750,000 in investable assets or a $1.5 million net worth.

Who Can Access Wealth Management Services?

Is Wealth Management Worth It

Wealth management services aren’t typically available for everyone. Due to the comprehensive nature of them, firms can require high minimums, such as $500,000 or $1 million. In fact, they may even charge additional fees to cover the costs of wealth management services, being that they’re comprehensive.

For reference, financial advisors at most firms typically charge fees based on a percentage of assets under management (AUM) for portfolio management services. These rates generally reside somewhere around 1% of AUM annually, though rates usually drop as you invest more with the firm. Managers can also charge clients in other ways, which can include hourly charges, fixed fees, commissions and performance-based fees.

While the specific amount you’ll pay for wealth management will vary significantly by firm, you’ll probably need at least $1 million. For example, Fidelity requires $10 million in investable assets for private wealth management services. However, it also has a simpler service with the firm has a lower minimum of $250,000.

When Should You Consider Wealth Management?

Ultimately, whether wealth management and other financial planning services are worth it completely depends upon your specific financial situation. For example, are you looking to build an estate plan, plan for retirement and make investments all at once? Then the holistic nature of wealth management might be for you.

Let’s say you have $1 million in investable assets, you set up a trust for your children and grandchildren and you are the beneficiary of your parents’ estate. A wealth manager can help you invest your funds, provide trust and estate planning services and work with you on a financial plan to minimize taxes and maximize income.

Wealth management services generally benefit clients most as they acquire more wealth to invest or manage. But this isn’t a hard and fast rule. As we mentioned earlier, some firms may offer clients simplified services at lower minimums.

Additionally, it’s also worth noting that since wealth managers typically combine different strategies to protect client wealth, these comprehensive services could benefit you if you don’t have enough time or resources to manage all the aspects of your financial life. Of course, there is a fee for this hands-off approach. In other words, decide based on your own needs if you think a wealth manager is necessary.

Bottom Line

Is Wealth Management Worth It

Wealth managers can bring both insight and valuable experience to your assets. But wealth management services are often available only for high-net-worth individuals. This isn’t always the case, though, so do your research at firms in your area to find a good match.

Clients often engage in wealth management when they have complex financial situations that require overarching services. These could include charitable giving, tax mitigation, investment management and estate planning, among others. There are few other services available that are that widespread, making it a strong offering for those who need it. But as we state above, each person’s situation is unique, so decide for yourself if it’s worth it.

Wealth Management Tips

  • If you’re thinking about working with a wealth manager or a financial advisor, make sure you explore your options. Finding the right financial advisor doesn’t have to be hard, though. SmartAsset’s free tool matches you with up to three financial advisors in your area in just five minutes. Get started now.
  • Wealth management isn’t for everyone. Plenty of people invest and manage their finances on their own. However, if you choose this path, it pays to be well prepared. SmartAsset has you covered on that front as well. Give our investment calculator a try and get started with smarter investing today.

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