Loading the player...

What is 'Wealth Management'

Wealth management is a high-level professional service that combines financial and investment advice, accounting and tax services, retirement planning and legal or estate planning for one set fee. Clients work with a single wealth manager who coordinates input from financial experts and can include coordinating advice from the client's own attorney, accountants, and insurance agent. Some wealth managers also provide banking services or advice on philanthropic activities.

BREAKING DOWN 'Wealth Management'

Wealth management is more than just investment advice, as it can encompass all parts of a person's financial life. The idea is that rather than trying to integrate pieces of advice and various products from a series of professionals, high net worth individuals benefit from a holistic approach in which a single manager coordinates all the services needed to manage their money and plan for their own or their family's current and future needs.

While the use of a wealth manager is based on the theory that they can provide services in any aspect of the financial field, some choose to specialize in particular areas. This may be based on the expertise of the wealth manager in question, or the primary focus of the business within which the wealth manager operates.

Wealth Management Example

For example, those in the direct employ of a firm known for investments may have more knowledge in the area of market strategy, while those working in the employ of a large bank may focus on areas such as the management of trusts and available credit options, overall estate planning or insurance options. The position is considered consultative in nature as the primary focus is providing needed guidance to those using the wealth management service.

Wealth Management Business Structures

Wealth managers may work as part of a small-scale business or as part of a larger firm, one generally associated with the finance industry. Depending on the business, wealth managers may function under different titles including financial consultant or financial advisor. A client may receive services from a single designated wealth manager or may have access to members of a specified wealth management team.

Strategies of a Wealth Manager

The wealth manager starts by developing a plan that will maintain and increase the client's wealth based on that individual's financial situation, goals and comfort level with risk. After the original plan is developed, the manager meets regularly with clients to update goals, review and rebalance the financial portfolio, and investigate whether additional services are needed, with the ultimate goal being to remain in the client’s service throughout their lifetime.

RELATED TERMS
  1. Wealth Tax

    Wealth tax is a tax based on the market value of assets that ...
  2. Common Law Property

    Common law property is a system that most states use to determine ...
  3. Money Manager

    A money manager is a person or financial firm that manages the ...
  4. Manager of Managers - MoM

    A manager of managers (MoM) approach is a type of oversight investment ...
  5. SAMA Foreign Holdings (Saudi Arabia)

    A Saudi Arabian sovereign wealth fund. The fund is controlled ...
  6. Managed Money

    Managed money is a means of investment whereby investors rely ...
Related Articles
  1. Financial Advisor

    How Big Is the Wealth Management and Financial Advisor Industry?

    Learn about the world's $74 trillion in managed assets, and why the wealth management industry is drastically different following the financial crisis of 2007-2008.
  2. Managing Wealth

    How to Find the Best Wealth Manager

    Finally there exists a small number of financial advisors who can be considered modern wealth managers. Here's how to find them.
  3. Financial Advisor

    The Wealth Management Certified Professional Designation

    The recently introduced Wealth Management Certified Professional credential includes a research-based curriculum for advisors.
  4. Personal Finance

    Career advice: Financial planner or wealth manager

    Learn the differences between a career in financial planning and a career in wealth management to identify which is more suited to your goals and talents.
  5. Managing Wealth

    Comparing Wealth Management Services: Not So Easy

    It's more than privilege checking, but not exactly private banking. What do bank wealth management services actually deliver?
  6. Financial Advisor

    Wealthy Clients: How Advisors Can Nab More of Them

    Wealth management firms still only manage a minority of the assets of high net worth individuals. Here are some insights into how to tap their market.
  7. Tech

    What Wealth Managers Need to Survive the Future

    Here is some insight into why wealth managers should accelerate plans to adopt technology and be willing to partner with financial tech firms.
  8. Managing Wealth

    Are You Earning Income or Building Wealth?

    Simply having income does not mean that you also have significant wealth.
  9. Personal Finance

    Private banking versus wealth management

    Discover the various ways in which private banking and wealth management services coincide, as well as the significant differences between them.
  10. Investing

    Private Wealth Shifting To Asia

    A look at the changing landscape of privately held wealth across the globe
RELATED FAQS
  1. What is the difference between portfolio management and financial planning?

    Understand the difference between financial planning and portfolio management, and learn which financial professionals can ... Read Answer >>
Hot Definitions
  1. Intrinsic Value

    Intrinsic value is the perceived or calculated value of a company, including tangible and intangible factors, and may differ ...
  2. Current Assets

    Current assets is a balance sheet account that represents the value of all assets that can reasonably expected to be converted ...
  3. Volatility

    Volatility measures how much the price of a security, derivative, or index fluctuates.
  4. Money Market

    The money market is a segment of the financial market in which financial instruments with high liquidity and very short maturities ...
  5. Cost of Debt

    Cost of debt is the effective rate that a company pays on its current debt as part of its capital structure.
  6. Depreciation

    Depreciation is an accounting method of allocating the cost of a tangible asset over its useful life and is used to account ...
Trading Center