The term “wealth management” sounds like just another trendy buzzword. You know, one of those terms like “thought leader” that doesn't actually mean anything? Unlike terms like “thought leader,” however, “wealth management” can be a game-changer. Really, it doesn't mean anything special on its own. Rather, it's a catch-all term that just means that you're improving or maintaining your financial situation, provided that you're already a high-net worth individual.
Although it is certainly complicated to try to manage a small investment portfolio, on a larger scale it is nearly impossible to manage alone. Basically, wealth management is personal finance for affluent people. Wealth management involves some of the same things as your run-of-the-mill personal finances, just with larger sums of money. Because finances get more complicated when you're looking at investing large sums of money, there are entire firms that specialize in wealth management.
You could just go to an average financial advisor, but they're likely to focus on small-potatoes asset allocation. You're better off going to visit someone who specializes in helping affluent clients—a wealth manager. Wealth managers get involved in their client's finances in a more in-depth way. For example, a wealth manager may assist with issues such as counseling over philanthropic donations, legal advice, and retirement planning.
Wealth managers are all about the big picture. They work with you to evaluate your needs, and how those needs may change. Further, they analyze your present financial situation. With the help of a wealth manager, you will be able to better understand your wealth as a whole. As your financial situation changes, they'll be on top of it, adjusting your investments and accounts as a whole to ensure that you are getting the most out of your money at all times.
They then help you select investments based on where you are in your life—for example, as you get older, they help you transition into more stable investments to prepare for retirement, while when you're younger, they may encourage you to invest in higher-risk, higher-yield options. They monitor the accounts to make sure that it remains the best option for you. An added bonus? They help with liability management as well. If you're a doctor, a wealth manager can help you set up a trust account that will be protected in case of malpractice.
Basically, wealth management is comprehensive. A financial planner may assist you with investment management, but typically they do just that. A wealth manager, on the other hand, is there to help you with all aspects of your financial health.
