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What is Wealth Management?

Wealth management can be thought of as a comprehensive service focused on taking a holistic look at a client’s financial picture, including services such as investment management, financial planning, tax planning, and estate planning.

While wealth management is generally considered a “high-end” type of service, and some wealth management firms may require a certain level of investment assets or minimum net worth, that is not always the case. For clients who need this level of service, it can be useful to consolidate all types of financial advice in one place with just one firm.

The objectives of wealth management will vary depending on the investor. Each client’s needs and situation are different, and good wealth advisors will tailor their advice accordingly.

Some key wealth management objectives for clients include:

  • Setting financial goals and designing strategies to achieve those goals.

  • Helping clients maximize their overall wealth

  • Managing their investments and finances

  • Setting strategies for passing on their wealth, also known as estate planning

What is wealth management?

Wealth management is a holistic service that focuses on helping mid-to high-net-worth clients grow their wealth, manage their liability exposure and devise strategies to pass their wealth on to their designated heirs. Wealth management services take a comprehensive approach to the financial situation of higher-net-worth clients, versus working with an advisor focused solely on financial planning or investment management.

Some typical services offered by wealth management firms include:

  • Investment management and advice

  • Comprehensive financial planning

  • Tax planning and accounting services

  • Estate planning

  • Philanthropic planning

  • Legal services

  • Retirement planning

Some of these services may be offered in conjunction with an outside partner, such as legal services or tax planning.

How much money is required for wealth management?

There are no hard and fast rules regarding how much is required for an investor to obtain wealth management services. Any minimums in terms of investable assets, net worth or other metrics will be set by individual wealth managers and their firms.

That said, a minimum of $2 million to $5 million in assets is the range where it makes sense to consider the services of a wealth management firm. Much below that and it might be hard to justify the expense of this type of service.

Again, these minimum levels will vary by firm. They may also vary a bit by your circumstances. For example, a wealth manager may want to take on the children of some of their current larger clients to help ensure the wealth they inherit stays with their firm. They may also want to establish a solid relationship with younger professionals such as doctors or attorneys to retain their business once they start to earn much higher incomes.

How to choose a wealth manager

When choosing a wealth manager to work with, you’ll want to look at several things.

First, does the wealth management firm work with clients like you? Some wealth managers may focus on clients of a certain type and if your situation doesn’t fit with that type of client then that particular wealth manager may not be a good fit for you.

Second, you’ll want to look at the manager’s qualifications. Some criteria you might use in selecting a wealth manager include:

  • What professional designations do they hold? Examples might include CFP (Certified Financial Planner), CPA (Certified Public Accountant), CFA (Chartered Financial Analyst)

  • What is their level of experience in the wealth management space?

  • What services does the firm offer?

  • How often do you expect to communicate with them?

  • What types of fees do they charge?

  • Are they independent or part of a larger firm?

Wealth Management Strategies

Wealth management strategies will vary based on the specific needs of the client. Overall, the reason to use a wealth management firm is to seek strategies to help maintain and grow your total wealth. This can mean different things to different people.

In general, wealth management entails coordinating all the moving parts of a client’s financial situation into a comprehensive wealth plan. This might include the client’s tax situation, investments and retirement planning.

Examples of wealth management strategies include:

  • Developing a comprehensive investment strategy covering all of the client’s various types of investment and retirement accounts

  • Coordinating an optimal tax planning strategy into their wealth planning.

  • Ensuring that the client’s estate plans reflect their desires.

  • Developing a succession plan for business owner clients.

For the right person, wealth management can offer peace of mind knowing that your wealth is not only maintained, but growing in the right areas.




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