What is Wealth Management?


If you are taking steps to better yourself and improve your financial future, then there is a good chance that you will at some point come across the term ‘Wealth Management’. So what exactly is Wealth Management and who is it for?

Let’s take a quick look at the principles of Wealth Management, including what it involves and also what kind of individuals or institutions offer Wealth Management services to clients.

What is Wealth Management and who is it for?

In simple terms, Wealth Management involves taking the best elements of financial advice and financial planning to help clients – usually high-net-worth clients – invest their money wisely, make it grow, keep it safe and to do all of this in the most tax efficient way possible. The term ‘Wealth Management’ has taken on a broader meaning in recent times, as many independent advisors now also take the principles of Wealth Management and offer them to clients who may not have quite as high a net-worth as would have previously been considered necessary in order to benefit from this kind of personal Wealth Management service.

As well as incorporating both tax and investment planning principles, Wealth Management would often also include making use of the principles of estate planning, to ensure that any wealth a client possesses is passed on to whoever they wish it to be passed on to in the most tax efficient way possible. This could involve passing on wealth to an individual, a group of individuals or perhaps even a charity if the client wanted to make use of his or her assets after death in a philanthropic way. A Wealth Management client who has philanthropy at the top of their priority list may also receive advice on how best they can use their wealth in a philanthropic way during their lifetime and not only when they pass on their wealth in their estate after death.

Who offers Wealth Management?

The term Wealth Management is used to describe the services offered by many different financial institutions and advisors around the world including banks, investment trust companies, independent advisors, brokerages, robo-advisors and others. Many of the bigger institutions who offer Wealth Management will usually have a variety of different Wealth Management products to choose from, depending upon the type of investment and also the level of risk a particular client would be happy to take on. These products could include:

  • Investment Funds – Enabling investors to pool their funds in an attempt to diversify risk or invest in sectors or products which might otherwise be out of their financial reach.
  • Structured Products – Medium to long-term investment products which offer the potential for higher returns.
  • Foreign Exchange Services – Allowing clients to grow their wealth by trading in the FX markets.
  • Insurance Products – Financial protection products, these may include Term Assurance, Critical Illness Cover and Income Protection.
  • ISAs – Enabling clients to invest in a tax efficient way, either in cash or via a Stocks and Shares ISA.
  • Bonds – Investing in government or company debt in various markets and currencies.
  • Equities TradingGiving you the ability to trade in various stock markets around the world.

You may have noticed that many of the above products and services are available to the individual investor too. So what is the difference between investing privately and using a Wealth Management firm or advisor? The major difference is the expert advice you will receive to help you when making investment decisions, whether it be in the form of an independent advisor making the decisions on your behalf or whether it be from of a personal relationship manager to advise you before making an important decision or trade on your own.

I hope this post has given you a basic idea of what the term ‘Wealth Management’ means and what it is all about. Are there some important principles or aspects of Wealth Management which you would like to add? If so, please consider leaving a comment below.

2 Responses to What is Wealth Management?

  1. SavvyJames says:

    Nice coverage of Wealth Management. Another factor to consider, at least in my experience, has been that many financial services company have a minimum requirement – net worth or investable assets – for clients to qualify for a program. I have also seen companies that provide different levels of Wealth Management services based net worth/investable assets.

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