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What Is Wealth Management?

What Is Wealth Management?

Wealth management is the most comprehensive form of financial planning, encompassing an entire strategic plan to manage an individual’s assets. This offering typically includes advice on multiple financial matters at once, such as retirement planning, investment management, financial planning, estate planning and more. While wealth management is typically associated with the more affluent, almost anyone can benefit from the service. You can use our free advisor matching tool to help you find a financial advisor who can provide wealth management services.

What Is Wealth Management?

Instead of focusing on a specific type of advice, such as retirement planning, portfolio management or estate planning, wealth management rolls all of these important needs into one. A wealth manager can work with you during every step of your financial journey to make sure you’re prepared for what lies ahead.

If you’re searching for a wealth manager, you may find that their minimum relationship sizes are quite high. That’s because they usually work with affluent people and their families, who are also referred to as “high-net-worth individuals.” In turn, it’s not uncommon for a wealth management firm to ask for a minimum in the range of $1 million or more to manage a collection of assets.

In addition to the aforementioned financial requirements that are needed to gain access to wealth management, you’ll need to be transparent with your advisor about all of your money and financial goals. In many cases, this means giving them the ability to make investment decisions on their own, though some advisors offer non-discretionary management.

What Services Are Part of Wealth Management?

As noted, wealth management is a comprehensive advisory offering that covers a wide range of services. Each of these services is designed to hit on a specific area of your finances. At the same time, though, they are all built to work together towards your ultimate objectives.

Services that may be part of your client-wealth manager relationship include:

  • Retirement planning
  • Estate planning
  • Investment management
  • General consulting
  • Tax planning
  • Business succession planning
  • Education funding planning
  • Debt consolidation and management
  • Liquidity planning
  • Family office services

Wealth management also gives you access to a dedicated wealth planner who can guide you through any financial issues you may need advice on. Having this level of close support could be incredibly helpful, as they’ll be extremely familiar with your overall financial situation. In addition, this consolidates your services at a single firm, making it easier to view your finances holistically.

The Wealth Management Process

What Is Wealth Management?

While every wealth management firm may have a slightly different process when it managing clients’ needs, most follow a path that resembles the following:

  1. Gather data
  2. Determine the client’s objectives
  3. Analyze the client’s current situation
  4. Create and recommend a complete plan for the future
  5. Implement the plan
  6. Monitor the Plan

As you’d expect, every wealth management relationship begins with gathering information about the client’s financial situation. This includes discerning their risk tolerance, income needs, time horizon, goals and other characteristics. This process can also involve looking at the client’s current loans, bank accounts, investments and more.

The more information a client can provide to their wealth manager, the better and more comprehensive the wealth management services will be. From here, advisors and wealth managers will devise a plan and work to implement it. These plans often include both long- and short-term plans.

Another key to the wealth management process is the fact that these relationships are typically ongoing. Given the comprehensive nature of wealth management services, wealth managers will consistently update the plans that they’ve created for you. By adjusting for changes in a client’s financial situation, advisors can ensure that they’re providing timely and effective advice.

Finding a Qualified Wealth Manager

There is not a standard certification that is provided in order for someone to offer wealth management services but all advisors should either be registered or certified. Many wealth managers are registered as investment advisors, but you can also work with a certified financial planner (CFP) who can provide similar services. CFPs are held to a fiduciary standard because of the rigorous certification that they all must go through.

Determining how your wealth manager is paid is important to figure out if they are a good fit for you. It’s typically a good idea to find an advisor who is not only certified but works as a fee-only fiduciary. This means that they are paid directly by you, and not by any potential products that they may recommend to you. As a fiduciary they are, instead, legally obligated to put your needs first.

As you can see, it’s not an easy task to find the right financial advisor for your situation, but it also shouldn’t be hard. That’s why we’ve developed a tool that will match you with financial advisors in your area that can be a good fit for what you’re looking for.

Alternatives to Wealth Management

Wealth management can often be prohibitively expensive for people who don’t have substantial wealth. This also means that those with a relatively simple financial situation might find these services to be unnecessary. That said, there are a number of different options out there for people who are nonetheless interested in planning for their financial future.

Two of the best potential alternatives to wealth management are:

  • Financial Planning: While wealth managers provide many different types of services, each of them can likely be had on a standalone basis at a financial planning or investment-centric firm. This will undoubtedly cut down on the cost of these services, though you’d miss out on the holistic nature of wealth management. Despite this, a one-off client-advisor relationship might be right for some people.
  • Robo-Advisors: Another option can be robo-advisor services, which automate the management of your investment portfolio. Firms like Wealthfront and Vanguard have robo-advisor services that adhere to specific strategies and make trades for you. The services you receive in these cases will typically not be nearly as personalized as what a dedicated wealth manager generally provides.

Bottom Line

What Is Wealth Management?

Wealth management is a comprehensive service that can be incredibly helpful in aligning all of your financial planning and investing needs. While other services may only focus on certain parts of your financial journey, wealth management is designed to go above and beyond. If you don’t think you’re ready to work with a wealth manager, you may opt for cheaper, less comprehensive options. For example, you can also work with a financial planner if you only need help with a specific aspect of your financial picture.

Tips for Finding a Wealth Manager

  • A wealth manager or financial advisor can be instrumental in helping guide you though your financial journey. Finding a qualified financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
  • Once you narrow your search for a wealth manager down, you’ll need to decide whether they’re right for you. Consider using SmartAsset’s guide to questions to ask a financial advisor during the interview process.

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