What is Wealth Management?

Being able to invest your money wisely is one of the biggest keys to financial success in our country. If you’re reading this, you probably already know how to make your money work for you and to grow your wealth. But now that you have a comfortable nest egg, how do you make sure it will continue working for you as you move into the golden years of your life?

A wealth manager can help you find the best ways to handle your assets so your future is comfortable and secure. Read on to learn more about wealth management and how these services can work for you.

What Is Wealth Management?

Wealth management is a service geared toward people who have extraordinary amounts of resources. It helps these clients to handle their money in profitable ways.

In general, wealth managers only work with very affluent clients who are handling large sums of money. This wealth is often passed down to other generations. They provide a variety of different financial services for their clients, depending on their needs.

For instance, let’s say a client has a couple of million dollars in liquid assets that they want to invest, as well as a sizeable trust fund for their children. They may also be planning end-of-life arrangements for themselves and their partner. A wealth manager can provide investment advice, as well as trust services and estate planning.

Wealth Management vs. Portfolio Management

Oftentimes, when we think about private wealth management, our minds go to stock portfolios. And while it’s certainly true that wealth managers do handle stock investments, it’s far from the only thing they do. A wealth manager provides a much more comprehensive package of services than a portfolio manager does.

Portfolio managers focus on helping clients to build stock portfolios that work well for their needs. In many cases, a portfolio manager may be part of a wealth management team. But they’ll be joined by advisors specializing in estate planning, tax management, trust funds, and so on.

Wealth Manager Credentials

There are a few credentials you’ll want to look for when you’re picking your wealth manager. In general, wealth managers will have some sort of financial certification, oftentimes as a registered investment advisor.

But it’s better to work with a certified financial planner if you can. They go through to most rigorous training process and are held to specific industry standards.

Certified public accountants, or CPAs, can also be valuable members of your wealth management team. They specialize in tax management, in addition to being able to handle other financial needs. You may also want to build a team with multiple different experts on it to give you the most well-rounded opinion.

Wealth Management Strategies

Wealth managers will tailor their strategies based on a number of different factors. How much money you have to manage, your specific financial goals, and your risk tolerance with your wealth will all play a part in shaping your personal wealth management strategy. That strategy may also change a bit over time as your wealth manager hones it and as the market shifts.

Your wealth management strategy will also depend on the individual factors in your financial picture. Your wealth management consultant will want to make sure your estate planning, tax management, trust fund arrangements, and retirement savings all coordinate to grow your wealth. If you don’t have trust funds or have specific plans for your estate, the other pieces may need to be handled differently.

Wealth Management Fees

So how much will it cost you to hire a wealth manager, and will your dividends make that expense worth it? In general, advisors will be paid a fee that’s a percent of the money they manage for you. Some work for set fees that are charged as a flat rate, annually, or as an hourly wage.

However your wealth manager gets paid, it’s best to make sure that their income is coming only from you. Oftentimes, financial managers may get extra commissions from specific financial institutions in exchange for them selling more of those products. This can motivate your wealth manager to push you towards a certain product, even if it isn’t the best solution for you.

Wealth Management Minimums

While wealth managers can grow any amount of money, there’s a certain minimum you want to have before hiring one. If you don’t meet those minimums, the fees may start to outstrip the amount of money you’re gaining. And many wealth managers tailor their services and expertise to clients who have a certain level of personal assets.

Some simpler wealth management services can suit clients who have about $250,000 to invest in their future. But many services are geared towards clients with at least $2 million in assets to manage. Some private firms focus their services on clients with $10 million or more that they need to grow.

Learn More About Wealth Management

Wealth management is a very valuable service for affluent clients looking to invest their money wisely. Wealth managers provide tax advice, estate planning services, trust fund management, portfolio management, retirement planning, and more.

For clients with the right amount of money, they can create a comprehensive plan to invest and grow your wealth in the best way for you.

If you’d like to learn more about wealth management, check out the rest of our site at Sara-Bay Financial Corporation. We are Sarasota investment advisors who provide independent and objective financial advice. Schedule a discovery call today and start creating a financial plan you can have confidence in.

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