What does a Wealth Manager Do?

A holistic suite of services.

Wealth Management is the most advanced form of financial planning services. It is mainly concerned with providing comprehensive investment management services to high net worth individuals that usually have complex financial planning needs. As a reference, these individuals are those who have at least $750,000 in assets under management (AUM) or have a net worth of $1.5 million or more.

It’s worth noting that wealth management isn’t limited to providing investment advice. Instead, it’s focused on a holistic suite of services that includes financial advice, accounting services, tax guidance, retirement, estate planning, and even legal help encompassing all aspects of a person’s current and future financial status. In its most straightforward meaning, wealth management refers to managing all aspects of a person’s money.

a piggy bank surrounded by stacks of money
More than just a retirement account, wealth management deals with all aspects of a person’s money.

As initially mentioned, wealth management is best suited for affluent clients. However, some less wealthy people who would like to manage their growing wealth better tend to seek wealth management services too. So even if you may not need wealth management services now, it’s worth knowing the value of a wealth manager when it comes to efficient financial and investment management, as it may be a wise move to hire one in the near future.

What is a Wealth Manager and what do they do?

A wealth manager is a professional who works with high net worth clients as they usually have complex financial needs. Instead of hiring multiple professionals, an affluent client can work with a wealth manager who will then coordinate with other experts on their behalf. For instance, a divorced individual who owns multiple assets and has a plethora of investments and accounts to manage may need an expert’s help in legal matters, property taxes, and investments. A wealth manager can build a holistic financial plan which will consider each of those to ensure the client will get the most favorable outcome.

a wealth manager can help build a holistic financial planning strategy.
Wealth managers look at many aspects of personal finance to build a holistic plan.

Generally, wealth managers would require a certain amount of investable assets from prospective clients before they would agree to work with them. Although account minimums widely vary from firm to firm, they can often be anywhere from $250,000 up to millions of dollars.

A wealth manager will typically act as an advisor, and they may provide insights into wealth strategies you might not be aware of. Every wealth manager and wealth management firm will have its own set of services and specialties in the financial and investment planning field, but the services they provide are always tailored to each of their client’s specific needs and goals. Aside from providing custom-tailored advice, they will also implement the plan for you from start to finish and will guide you all throughout, ensuring you have expert guidance whenever you need it.

Some of the typical offerings in the wealth management industry are as follows:

  • Investment Planning and Management Services
  • Executive Benefit Planning
  • Business Planning
  • Investment Management
  • Tax Minimization
  • Long-term Financial Planning
  • Retirement Planning
  • Estate and Trust Planning
  • Strategic Tax Planning
  • Family Legacy Planning
  • Philanthropic Planning
  • Risk management
  • Insurance Review and Planning
  • Educational Planning
  • Legal Advice
  • Investment Banking Services

Also, wealth managers serve as the main point of contact for a client. They will work and coordinate with various financial experts such as attorneys, accountants, and insurance agents to ensure the client gets the utmost benefits from their wealth. Depending on the firm, the client may work with an entire team of financial professionals or an individual advisor that will help them manage all aspects of their wealth.

What fees does a wealth manager charge?

Like most financial advisors, wealth managers set an annual fee schedule based on the client’s AUM or assets under management. The fee rates are usually around 1%, although clients with higher AUM tend to have lower rates.

Image of a piggy bank with a percentage sign next to it. The image asks the question: are there wealth management fees?
Fixed fee or hourly rate? It’s an important question to ask a wealth manager.

Some wealth management firms charge fixed fees or on an hourly basis. Or sometimes, a combination of these two. However, on top of the wealth manager fees, clients will also need to consider other expenses associated with brokerages, funds, trading, and additional miscellaneous fees, plus the professional fees of other experts necessary to properly and efficiently manage the client’s wealth and finances. However, if the firm uses a wrap fee program, all expenses will be bundled into a single annual rate.

Wealth Manager vs. Other Financial Advisors

Although wealth managers are a type of financial advisor, they are distinct from the rest because they manage clients’ money holistically by looking at the entire picture. Investment advisors, financial planners, and financial consultants, on the other hand, focus on their specific area of expertise and will not usually consider other aspects of the client’s financial situation.

Wealth managers, much like financial planners, can help clients identify their objectives and set their financial goals to be able to build the most beneficial financial plan. And just like investment advisors, a wealth manager can help clients pick the most strategic investments for their portfolios within the appropriate asset allocations. However, investment advisors may not look at the client’s overall financial status. They may not provide financial planning and relationship management services, even if it’s directly related to the client’s investments. In addition, wealth management firms also usually provide clients with brokerage accounts. This allows clients to have virtual access to any type of investment.

As evident as it is, a wealth manager offers more services than a typical financial advisor. Thus, working with one can come with multiple benefits and convenience that a client may not enjoy by hiring numerous professionals.

Is hiring a wealth manager worth it?

Wealth managers can assist clients with all of their financial planning needs, from business-related concerns like investment and tax ramifications up to estate and trust planning. So if you are an affluent individual needing help with many aspects of your financial life, then hiring a wealth manager to help manage all those aspects is a wise choice. A wealth manager’s comprehensive expertise in the financial industry can provide you with the utmost benefits in ensuring that you don’t outlive your wealth, and that your and your family’s financial future is secured.

wealth management can help ensure your family’s financial future is secure.
Securing a future for the people that matter the most to you.

Since wealth managers tend to work with financially complex clients, they usually have more expertise and experience than typical financial advisors. However, if you have specific financial planning or investment needs, then a financial planner or an investment advisor may be a good alternative.

How to choose a wealth manager?

When it comes to choosing a wealth manager to work with, the first thing you should consider is the wealth manager’s account minimum. This first step is one of the best indications of whether the specific firm or advisor is a realistic option for you. Asking prospect wealth managers about their typical client base will also help you get a clearer idea of who they usually work with.

Checking certifications is also crucial as it can demonstrate the wealth manager’s experience and expertise. You should also review the wealth manager’s fees and associated expenses to get a rough idea of how much the services will cost you and whether it’s reasonable for you. Find out if they are selling any third-party products for a commission as well as if he or she is a fiduciary.

We recommend looking through the firm’s Form ADV. All financial advisor firms duly registered with the SEC or a state organization are required to have this document. It will give you tons of information about the firm’s past disciplinary issues if any, its client base, services, and so much more.

Key Takeaway

Securing your hard-earned wealth can be the wisest decision you could ever make in your lifetime. And working with someone who has the expertise to make it happen, is a decision you would certainly be grateful for. Just be sure to choose a reliable and trustworthy wealth manager for you to get the utmost benefits from the services. Good luck!

References for this article:

Just a dude that loves to write about anything and everything under the sun!

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