A wealth manager is the conductor of an affluent investor’s symphony. By combining a diverse mix of complementary wealth management services like portfolio management, estate planning and tax services, they aim to keep every aspect of the wealthy’s financial lives working in perfect harmony.
To qualify to work with a wealth management advisor, you typically need to meet certain net worth and investable assets thresholds. Together, we’ll explore what this high-end service offers and what it takes to access these specialized advisors.
Wealth management is a specialized type of financial advisory service that coordinates every aspect of an affluent person’s financial life. As your finances tend to become more complex as you increase your wealth, you may find it helpful to work with an advisor who’s well-versed in those complexities.
That’s where wealth managers come in.
Wealth managers provide holistic financial planning that encompasses every aspect of your finances. They often take a goals-based approach to financial management by creating sophisticated plans to meet your various goals, from investment strategy and tax planning to the legalities of estate and legacy planning.
However, not all firms employ the wide range of professionals you might need to carry out the wealth manager’s plan. In those cases, wealth managers typically have a network of specialized professionals they trust to handle your needs with a high degree of expertise.
For example, say you own a business with locations in multiple countries and have family members you want to inherit your business and assets.
In that case, your wealth manager would create an in-depth financial plan to address your present needs and goals. Your manager would then coordinate with specialists like estate attorneys, business succession specialists and tax professionals with expertise in multinational businesses to put your plan in motion.
A wealth management firm provides tailored and comprehensive financial management services to high net worth and ultra-wealthy individuals and families. They often coordinate the entire spectrum of financial services, from banking and budgeting to investing, tax guidance and legal advice.
Thresholds for wealth management vary by firm but typically begin at $1 million in investable assets. Firms may also set higher account minimums for their wealth management programs.
One of the reasons firms set such high limits is due to the higher-risk investment products they offer wealth management clients. For instance, hedge funds, venture capital and private equity are only available to accredited investors. The Securities Act of 1933 defines accredited investors as:
Private wealth management caters to the ultra-affluent and can require minimum account balances of $5 million or more. While capabilities will vary by firm, you’ll often find products and services such as family office services and philanthropic planning in addition to investment advice and in-house research teams.
Wealth management companies offer a range of services to help address your various financial needs, such as:
As wealth management services often vary by firm, it’s important to research several on your path to finding your ideal relationship. You’ll want to consider three key areas: capabilities, qualifications and industry standing.
Before meeting with firms or individual managers, it helps to have an idea of the services you want, the investments you want access to and your total net worth. This information will prevent you from meeting with firms that can’t meet your needs.
For example, if you want access to specialized investments like private funds and secondaries, you can select firms with these capabilities. On the other hand, you might want a firm with in-house estate planning attorneys, which would rule out firms that outsource their clients’ estate planning needs.
As wealth management goes above and beyond everyday investment management and financial planning, an advisor’s certifications can offer additional peace of mind. Some of the more advanced credentials to look for include:
While these credentials aren’t required, they can indicate a professional with advanced training in the needs of affluent investors.
Before engaging with a wealth manager or financial advisor, we highly recommend researching the firm and the individual using the Securities and Exchange Commission (SEC) Form ADV or FINRA’s BrokerCheck website.
These sites offer insight into how firms make money, how advisors are compensated and whether the firm or advisor has had any disciplinary measures against them in the past 10 years.
A better question is, “What is wealth management worth to you?”
While these financial specialists provide carefully curated services for those who don’t want to spend their days mired in financial chores, these services don’t come cheap.
A wealth manager could make perfect sense if you’re an affluent investor with complex finances who wants a single point of contact for every aspect of your financial life.
On the other hand, if you’re a high net worth individual with most of your assets in your home and employer-sponsored retirement account, you may do just fine with a traditional financial advisor.
The fantastic thing about investing is there’s always something new to learn. So to help you keep the momentum going, we put together a few ideas for the next steps you can take:
We will use this information to find the right advisor near you
The “Find a Financial Advisor” links contained in this article will direct you to webpages devoted to MagnifyMoney Advisor (“MMA”). After completing a brief questionnaire, you will be matched with certain financial advisers who participate in MMA’s referral program, which may or may not include the investment advisers discussed.