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Wealth Manager

A wealth manager is a subset of financial advisor that primarily serves high-net-worth and ultra-high-net-worth individuals. These advisors’ role is far more comprehensive than just offering a client investment advice. They focus on a holistic suite of services that encompasses all parts of a person’s financial life. This can include investment management and financial planning, as well as accounting and tax services, retirement planning and estate planning. To find suitable financial advisors in your area, try using SmartAsset’s free advisor matching tool.

What Is a Wealth Manager, and What Services Do They Provide?

As obvious as it sounds, wealth managers are in the business of wealth management. This is a set of services that combines several areas of personal finance into a single comprehensive package that’s designed to address the entirety of an individual’s financial life. In the end, the goal of wealth management is to grow and preserve wealth over the long term.

Every wealth manager and wealth management firm has its own set of services and specialties. These can cover a vast range of topics, which will give you the ability to select the manager that’s best suited to your needs. Here’s a breakdown of some of the more common wealth manager services you’ll come across:

  • Investment advice and management
  • General long-term financial planning
  • Estate planning
  • Trust services
  • Strategic tax planning
  • Family legacy planning
  • Philanthropic planning
  • Risk management and insurance planning
  • Retirement planning
  • Legal planning
  • Banking services

Additionally, a wealth manager may serve as the central point of contact for a client. This involves coordinating communications and relationships with their various financial experts, such as an attorney, accountant or insurance agent.

Who Typically Works With Wealth Managers?

Wealth Manager

Wealth managers primarily serve affluent clients who have large amounts of investable assets. These clients are typically referred to as high-net-worth or ultra-high-net-worth individuals. For reference, the U.S. Securities and Exchange Commission (SEC) defines a high-net-worth individual as someone who has at least $750,000 in AUM or has a net worth of $1.5 million or more.

Wealth managers usually require prospective clients to have a certain amount of investable assets before they’ll agree to work with them. Account minimums vary wildly from firm to firm. However, they can often be anywhere from $5,000 all the way up to millions of dollars.

How Much Do Wealth Managers Charge?

Like most financial advisors, wealth managers often charge clients using a set annual fee schedule. In most cases, these fees are based on a percentage of the client’s overall assets under management (AUM). Fee rates usually come in somewhere around 1%, though they can vary higher or lower than that as well. Clients with higher AUM levels may have lower fee rates.

Other wealth managers may charge fixed annual fees, hourly fees or some combination of the two. However, even if your wealth manager charges only a percentage of AUM, you may be paying more than just that. Percentage fees don’t account for the underlying expenses charged by mutual funds and exchange-traded funds (ETFs), or for trading fees.

How to Choose a Wealth Manager

Wealth Manager

Choosing a wealth manager is a similar process to picking a financial advisor. One of the first things to take note of is a wealth manager’s account minimum. This is often an indication of whether or not the advisor is a realistic option for you. Also, ask each wealth manager about their typical client base to get an idea of who they usually work with.

Furthermore, a wealth manager’s advisory certifications can demonstrate experience in a certain areas, like financial planning. You should also review a wealth manager’s fees to get an idea of how much their services will cost you. Note whether they sell any third-party products for a commission, and if he or she is a fiduciary.

A good resource to look through is the firm’s Form ADV. This is a document that all financial advisor firms registered with the SEC or a state organization must file. The Form ADV provides tons of information on any of the firm’s past disciplinary issues, its client base and services and more.

If even after doing your research you’re unsure of what wealth manager to go with, consider using a matching service. For example, SmartAsset’s free tool can pair you with as many as three suitable advisors in your area. Advisors are chosen specifically for you based on your answers to a short questionnaire.

Comparing Wealth Managers to Other Types of Financial Professionals

Investment advisors and financial planners are alternatives to a wealth manager. They differ in their specialties, though, as they focus on a specific piece of your financial situation. Conversely, wealth managers look at the full picture and manage all of the various parts of it

Like a financial planner, a wealth manager can help clients identify their objectives and map out a financial plan to achieve them. Unlike wealth managers, who typically help wealthy clients manage a more complex financial situation, financial planners serve many types of investors who wants help drawing up a budget and a long-term road map.

Similar to investment advisors, a wealth manager can help clients select strategic, long-term investments for their portfolios within appropriate asset allocations. While investment advisors zero in on this particular aspect, wealth managers are also looking at a client’s overall financial life and providing services like financial planning and relationship management.

Tips for Finding a Wealth Manager

  • Financial advisors and wealth managers alike can be great partners for anyone looking to get their financial life in order. Luckily, finding a good financial advisor doesn’t have to be hard. SmartAsset’s free tool will pair you with local advisors. Get started now.
  • When picking a financial advisor or wealth manager, make sure they abide by fiduciary duty. This ensures that they will act in your best interest, no matter what. In addition, it could be valuable to figure out if a firm you’re looking at is fee-based or fee-only.
  • Consider what purpose you’d like your financial advisor to serve. For instance, if you need help figuring out how much to save for retirement, go with an advisor who has experience in that area and a relevant certification.

Photo credit: ©iStock.com/demaerre, ©iStock.com/Rawpixel Ltd, ©iStock.com/SIphotography

Becca Stanek, CEPF® Becca Stanek is a graduate of DePauw University. Becca is an experienced writer/editor who serves as a retirement expert for SmartAsset. She's passionate about helping people understand the sometimes daunting ins and outs of personal finance. Becca is a Certified Educator in Personal Finance® (CEPF®) and a member of the Society for Advancing Business Editing and Writing. Her work has also appeared at Time, The Week, Mic and The Washington Monthly. Becca grew up in the Midwest and now lives in New York City.
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