What Is Wealth Management?

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by Beatrice Mastropietro · 11 min read
What Is Wealth Management?
Photo: QuoteInspector

Have you heard about wealth management? Check out this guide to find out what wealth managers do and understand whether you need to hire such an expert.

Individual financial planning requirements change over time, and the advice you receive now may seem outdated in a broader sense. The level of financial status determines the type of management required to manage those funds as an individual’s wealth rises. With each level of assets, the appropriate monitoring and reporting process should be implemented to maintain these assets.

There is no need for rich people who are in the lower levels of individual financial planning to keep track of their funds every day. They only need to see their advisors once or twice a year, depending on what they plan to do with their savings.

When you are financially independent, your wealth will be more than enough to provide you with a comfortable life. At this stage, the best thing to do is not worry about losing it. This requires less management and effort compared to when they were at the beginning or middle levels of individual financial planning.

Understanding Wealth Management

Wealth management is an investment advisory discipline done by only a limited number of certified professionals who seek to manage the entire area of finances of an individual. Such professionals usually work with those individuals who hold high net-worth or ultra-high-net-worth assets.

The purpose of wealth management is to help individuals manage their entire economic life. Only a small number of bonded experts administer the entirety of a person’s financial picture, seeking to handle everything from loans to stocks and bonds. These people generally work with those who have significant net worth or ultra-high-net-worth possessions. Wealth management aims to address all the areas of an individual’s finances and seek to manage them better to generate more wealth over the long term. Wealth managers coordinate and plan such issues as investment management, retail banking services, legal and tax advice as well as others.

While some customers are extremely wealthy, others might only have a million or two to their name. If an individual’s wealth is at neither end of the spectrum, there may be no need for wealth management. Those with smaller assets can generally get away with using a financial planner to help them manage their investment portfolios. A simple fee-based financial planner will do most of what they need without costing too much in fees that many larger institutions charges.

In the financial industry, it is believed that managing an individual’s wealth can bring immense returns from all parts of their investments. This is because a wealth manager has a holistic view of the portfolio and provides advice accordingly to ensure maximum gains at all times. The management may include purchasing of assets, use of risk management strategies, and even during the exit process from various investments. It is up to the wealth manager to decide to which extent such services need to be provided to an individual client.

The worth of an individual determines whether a wealth manager is needed or not, the U.S. Securities and Exchange Commission (SEC) explicitly states that a high net-worth individual is someone that has at least $750,000 under management. While some wealth managers might pose an account minimum restriction, some others are open to individuals with less than $750,000 worth of invested assets.

How Does Wealth Management Work?

Wealth management is a service provided by financial institutions and private banks that offers advice on savings, investments, and other financial activities to those with total assets of more than $100,000. Such services aim to help individuals grow their assets as much as possible within four walls (banks), restricting the use of outside investment firms. If you have a minimum of $100,000 and don’t know where to invest them, we strongly recommend you to contact Credence Capital.

Wealth management seeks to merge both financial planning and specialized financial services with an aim to plan and execute long-term strategies for the sustenance and growth of a client’s sizable wealth. The manager also considers those factors that are unique to the client like their goals, risk’s comfort level, and the entire financial situation to develop the plan.

The manager will then fix consecutive appointments with the client to give him information on the plan being executed for the individual’s financial profile. The plan can be re-reviewed and re-adjusted depending on the events that may happen during the period of the plan.

Normally, your account officer would help you determine your financial goals and define an investment strategy that matches those goals as much as possible. If such a person is not available in the branch you usually use, you can turn to a different branch or contact the bank’s central office where you opened your account. Such requests are usually handled within one week via email, phone, or mail correspondence.

High-end banks normally have an option for combined investment management services with wealth management, termed “Wealth Management & Investment.” This type of service is more suitable for those who wish to use the same branch for banking and investment services. It requires a minimum deposit of $1 million and offers planning and management for assets held both inside and outside the bank. Customers with over $10 million in assets may receive personal financial advice directly from an advisor or planner.

Wealth Management vs. Portfolio Management

While both these disciplines have similar aims, namely to manage investments and achieve financial goals, they are different from each other. Unlike a portfolio manager who just manages an individual’s investment portfolio, a wealth manager must provide comprehensive management that includes investments and estate planning and risk management strategies.

You might be wondering whether you need to hire a wealth manager or whether you can manage your portfolio of investments. Before you take any step towards hiring an expert for wealth management, it is important to understand the amount of time and expertise needed to manage your financials.

While managing a portfolio of investments can require a lot of time and research, some people prefer to have their own investment manager, while others prefer to go for a family office model where an entire finance department is assigned to look after the client’s finances.

In addition, you need to consider how much you are willing to spend on wealth management without compromising on other areas such as family budgeting or even spending on luxury goods. Once these factors have been considered, it will be easier for you to decide whether wealth management suits your requirement or not.

As with all forms of business activity, selecting the right partner is very important in ensuring that your interests are always looked after when dealing with large amounts of money.

Hiring a wealth manager requires an individual to only provide the necessary information such as goals, risk appetite, and other personal details such as age, tax status, assets, and liabilities. The rest of the process, which includes account opening formalities, asset allocation, and portfolio management, will be handled by the wealth manager ensuring that you get returns from all your investments at all times.

Thus, it is clear that if you want to achieve financial goals in a timely manner and at low costs, there is no substitute for hiring an expert to handle your finances so you can enjoy life without worrying about where your next meal comes from or how much debt you have taken on.

Wealth Management through Personal Capital Advisors (PCA) is well known for its expertise in the personal capital market. They provide holistic wealth management services and full-service brokerage capabilities, offering individual investors access to a high quality of personalized service and financial advice. PCA’s team of professionals regularly monitors client portfolios and proactively contacts them when changes occur in the marketplace. Personal Capital Advisors also offers comprehensive tax strategies to help minimize clients’ liabilities and plan for future needs such as college education and retirement goals.

Personal Capital Advisors is an independent investment advisory firm dedicated to providing wealth management plans, retirement plans, social security guidance, estate planning assistance, and portfolio management solutions that fit clients’ overall goals. Personal Capital’s extensive experience allows for objective decisions regarding various financial matters such as Social Security benefits, IRA withdrawals, investment strategies, and estate planning.

Functions of a Wealth Manager

Wealth managers offer numerous services and should have experience in a lot of related areas including estate planning, wealth transfers, tax, retirement planning, mortgages, risk management, trust services, banking services, and several other expertise while acting as the main point coordinating all decisions and actions made in these fields.

The wealth manager formulates strategies that are personalized to the individual’s financial situation. Such a professional also acts as an intermediary point between the client’s other advisors and financial experts.

The following are some of the functions that a wealth manager would typically perform or handle for you:

  • Evaluate your overall financial situation, including all sources of income.
  • Develop an investment strategy based on risk tolerance and objectives.
  • Create a strategy to meet your objectives, with an emphasis on tax management.
  • Manage investments through regular checks and re-balancing.
  • Evaluate the impact of major life events such as marriage or retirement.
  • Conduct estate planning to ensure that all assets are properly distributed after your death.
  • Provide guidance on insurance coverage, including life insurance and property/casualty insurance.

A fee schedule would be set between the client and the wealth manager to decide how much and when the client would pay. In most cases, wealth managers may ask for a percentage of the assets being managed. The average percentage is 1%, but the rate might be lower depending on the total assets worth of the client.

Some wealth managers are paid based on hourly fees or fixed annual fees, and this would not include the fees incurred along the process like expenses incurred by employing the services of outside experts or counsel.

How to Choose a Wealth Manager?

There are some tips and steps which the client may take into consideration to secure the right wealth management professional. The client should get familiarized with the portfolio being handled by wealth managers. This will help to understand the specialization and expertise of a specialist.

Also, the client should get a picture of the services and experience level of a wealth manager, the pricing, and the track record. There exists a good resource for the client to reference. It is known as the Form ADV which is paperwork that all the financial advisors and firms have to file to get registered with the U.S. Securities and Exchange Commission.

This bounds all practicing professionals to a fiduciary duty to act in their client’s best interests at all times. The Form ADV also contains the disciplinary issues an advisor or firm might have on their record.

Wealth Manager vs. Financial Planner vs. Investment Advisor

An investment advisor is a professional who maintains a focus on long-term investment plans for clients with an above-average amount of wealth as well as deals with all sorts of investments and securities for the client. Such an expert creates a personalized investment portfolio for clients and takes steps to generate more revenue for them.

A financial planner is an expert who provides clients with advice on how to grow their wealth as well as creates a comprehensive plan for the financial future for clients. Your financial planner will assess your current financial lifestyle and help you to achieve long-term goals by setting budgets and making financial plans.

A wealth manager is someone who helps individuals, with a large number of assets and significant revenue income. Wealth managers take into account the total financial status of clients and elaborate strategies on how to enhance clients’ wealth.

Wealth managers differ from the former two as they do more comprehensive work.


Wealth management is an essential field for people with high incomes to manage their assets professionally. Faced with choosing how to work their wealth, people need professionals who can help them make the right decisions. In these cases, wealth managers are professionals who help high-net-worth individuals take control of their money and attain financial success.

Choosing the right financial professional to deal with their wealth is a necessity for individuals seeking to achieve their financial goals. Wealth managers usually work with individuals with really high net-worth assets who are looking for proper management of their entire financial operation.



What is wealth management?

Wealth management is an investment advisory discipline done by only a limited number of certified professionals who seek to manage the entire area of finances of an individual. Such professionals usually work with those individuals who hold high net-worth or ultra-high-net-worth assets.

How does wealth management work?

Wealth management works by using so-called “wealth management solutions,” services provided by financial institutions to their clients, which administer assets and investments. 

What is the difference between wealth management and portfolio management?

While both these disciplines have similar aims, namely to manage investments and achieve financial goals, they are different from each other. Unlike a portfolio manager who just manages an individual’s investment portfolio, a wealth manager must provide comprehensive management that includes investments and estate planning and risk management strategies.

What functions does a wealth manager perform?

The wealth manager functions include building a comprehensive strategy to accomplish the client’s financial objectives, monitoring all of his or her assets and liabilities, providing advice and counsel, developing a plan to reduce the tax liabilities of the client, and finally making recommendations on various financial products like insurance and investments.

What fees do wealth managers charge?

Wealth managers’ fees can vary depending on the services provided and the number of assets under management. Generally, however, they will charge a percentage of the Assets under management (AUM).

How is a wealth manager different from a financial planner and an investment advisor?

Unlike financial planners and investment advisors, wealth managers are typically employed by large firms that provide additional services such as brokerage, referrals to other professional service providers, connections to family office services, and assistance with philanthropic activities.

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