Wealth Management

Financial Dictionary -> General Finance -> Wealth Management

Wealth management is a discipline in economics which aims to provide financial advice to individuals and legal entities regarding their investments and the running of their businesses. It is an umbrella term which may include, among others, financial planning, investment portfolio management, tax preparation, and legal representation.

Wealth management services are typically provided by large international banks, trust companies, and brokerage houses which have special departments that help customers plan their estate and invest their assets in a way that suits their particular financial needs and goals.

Among the biggest world institutions that offer management of customer funds are Lloyds TSB Private Banking, Wealthmasters UK Limited, Glitnir Bank Luxembourg S.A., Sydney Charles Insurance Advisers Limited, and Transglobe Independent Financial Advisors Limited. Their target clients are upper-end or medium-sized companies with assets of or over half a million dollars. Usually, whole teams of management professionals work for a particular client.

In comparison, the management of smaller companies requires much less work; therefore, firms that have more limited resources recourse to the services of independent certified financial advisers. These are people who have solid economic education - at least a master's degree in Business Administration or other similar discipline - and provide their services at a more accessible price.

Ever since the financial crisis crushed international and local economies all over the world, the roles and duties of wealth management advisors have broadened and diversified. Whereas before the autumn of 2008, wealth managers were occupied mostly with investment and asset allocation, nowadays they are also required to make inquires and have available and sufficient objective information about their clients' products and services, their performance, risk and security levels. Moreover, management experts today are engaged in far more active communication with their customers since the need to receive advice and understand financial practices has significantly increased in last three years.

Wealth management assists individuals in determining their objective monetary goals and developing actionable strategies to realize them. Management experts are required to protect their clients against financial risks. Greater financial wealth comes with more complex risks with regard to taxation and legal regulations. Diversification is necessary when investing substantial financial resource. Professional wealth management services by corporate entities or independent advisers are of great help when it comes to diversification.

Wealth management offers diverse services related to investment, insurance, and retirement planning, asset protection, wealth transfer, and estate planning. Investment planning helps clients to invest their money in diverse financial products. Insurance planning assists individuals when selecting among different types of insurance plans and packages. Retirement planning is essential in determining the amount of money one will require after retirement. Tax planning, on the other hand, helps to minimize tax return (e.g. support various causes or plan for charities). Estate planning protects the client and his estate from crediting institutions, taxes, and lawsuits. This type of planning is important for everyone with high net worth. Wealth transfer is essential when one decides to pass wealth to his dependents.

Taking advantage of wealth management services can be of huge benefit for your business. Before you settle on a financial advisor, however, carefully consider the following issues: your relevant financial history (tax returns, investments, insurance policies, etc.), your short- and long-term financial goals, the areas where you need assistance, as well as the investment risk you are ready to take. Make extensive research using respected publications (e.g. the online Worth Magazine) and obtain expert opinions. Schedule meetings and/or interviews with the short-listed advisers which fit your particular needs best. Before choosing a wealth managing company, make sure it has good credentials and enjoys positive feedback from both past and current customers.