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What Is Wealth Management?

What is wealth management and is it the same as financial advice?

The answer, not what you would expect.

Wealth management takes the complexity out of each piece of your financial strategy and provides a 360º solution that is aligned with your objectives. In simple terms, it is a professional service that combines financial and investment advice, accounting and tax services, insurance, retirement planning, and legal or estate planning. Working with a wealth manager allows an individual or business to take the guesswork out of each piece of their financial playbook. While working primarily with one wealth manager, behind the scenes this person is coordinating input from a team of financial experts which can include coordinating advice from the client’s own attorney, accountants, and insurance agents.

Still confused on how wealth management differs from financial advice?

Let us help break it down in our Wealth Management 101 to see if hiring a wealth manager is a right fit for you.

Breaking it down…

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.

Wealth Management Firms

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 firm and structure, 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 a 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.

Applying this to a real-life example

Meet Joe. Joe is a small business owner with 30 employees. He has roughly $2 million in cash assets sitting in the bank and currently does not hold any investments. Joe has worked hard to get to where he is today and his business is thriving because of it. His goal is to one day leave his company to his kids once he retires. The problem, Joe does not have a strategy in place to achieve this objective. While his focus was protecting and building his company he never discussed a transition plan with anyone or considered what retirement might look like or how much he would need to retire.

After discussing some concerns with a friend about leaving this legacy to his kids while retiring comfortably, Joe was introduced to Bill a financial consultant with a local wealth management firm. In this meeting, Joe got to discuss his values and the future he envisioned for himself and his family. Bill helped Joe determine key goals and objectives, determined Joe’s actual net-worth, his desired cash-flow for retirement, his legacy wishes and charitable giving.

After the consultation, Bill reviewed Joe’s financial statements from various sources, such as his accountant, attorney, insurance agency, banker, etc… From this extensive review and coordination, Bill uncovered some tax strategies Joe was not taking advantage of that could help with his wealth transfer and developed a custom-tailored financial plan for Joe that would outline his path to retirement. In this plan, he helped establish an investment strategy aligned with Joe’s risk tolerance, thus allowing Joe to retire sooner than he imagined.

Bill also helped Joe find a long-term care plan that would protect him from having to liquidate his assets to pay for any medical care he might need in the future.

In sum, Bill helped Joe develop a comprehensive holistic plan by providing assistance through estate, business, and charitable planning while identifying solutions for tax and legal issues. In turn, taking the complexity out of Joe’s goals and turn them into clear solutions.

Tim Ellsworth, President of Premier Wealth Management simplifies wealth management like this.

“Wealth managers try to take the time to develop a relationship with someone and get in the boat with them and help them row.”

If you are interested in learning more about how wealth management can help you achieve financial success fill out the form below to schedule a complimentary consultation with one of our wealth managers.

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