What is wealth management?

Wealth management is a comprehensive financial service designed to help individuals manage, maintain and grow their wealth. Depending on the individual’s goals, it may include activities to help manage assets and investments, minimize potential risks or liabilities, or create an inheritance plan.

This service is typically geared toward high-net-worth individuals (HNWIs) and offered by wealth management advisers, who either work independently or through a firm. Some wealth management firms may require a minimum investable asset or net worth threshold for receiving wealth management services.

What you’ll learn:

• Wealth management is a financial service that typically helps high-net-worth clients manage their assets.

• Some common wealth management strategies include financial planning, asset management, asset allocation, estate planning and tax accounting.

• The U.S. Securities and Exchange Commission (SEC) recommends researching and verifying a wealth management adviser’s credentials before working with them.

Wealth management services work by creating a personalized financial strategy based on a client’s goals, assets, income and long-term needs. Multiple services, such as investment management, estate planning or trust services, are combined into one comprehensive plan that alleviates the need to work with several different financial professionals. To receive this service, wealth management advisers may charge a flat-rate fee or a percentage of any assets they manage.

Typically, wealth advisers begin with consulting services before creating a strategy. And there may be times when they bring in outside partners like tax advisers, accountants or attorneys.

Wealth management strategies are typically tailored to each client. They’re offered by wealth management advisers who may work individually or through a firm. Strategies can include:

Financial planning involves a combination of advising and strategizing. For example, advisers might help their clients by providing investment advice or offering savings strategies that could help them increase their wealth over time.

With asset allocation, advisers decide how to allocate the investor’s funds so that all their investments work together to meet the desired financial goal. Asset management is the oversight and adjustment of those investments.

Estate planning helps clients create a plan for their assets should they die or become incapacitated. This includes determining beneficiaries and creating a will or trust.

Advisers work closely with tax professionals to help their clients prepare, file and maximize their tax returns. They can advise clients on which deductions to take and precautions to be aware of based on their circumstances.

Retirement planning helps individuals manage assets, debt and potential retirement income so they work toward financial security once they stop working.

The SEC lists some things to think about when working with an investment professional: 

• Understand the client relationship summary: Prospective clients can find information on the types of services the adviser or firm offers, any conflicts of interest they may have, their legal and disciplinary history and their standard of conduct.

• Review their credentials: Having a title like Certified Investment Management Analyst (CIMA) or Certified Private Wealth Advisor (CPWA), among others, proves the person has met the industry standard for the skills needed for this career. 

• Research the SEC database: The SEC’s database shows an adviser’s or investment firm’s records—for instance, if they’re licensed by the SEC and registered through the state or with the Financial Industry Regulatory Authority (FINRA). The database also records claims or reports filed against them.

• Consider the fees: Each wealth manager may have different fees based on their services and experience level.

Wealth management advisers typically handle the wealth of HNWIs. Financial advisers provide services to a broader range of clients who want assistance with managing their money, creating investment strategies and meeting their financial goals. This may include budgeting, retirement planning or saving for a major financial expense, like college or a house.

Wealth management services help people with a high net worth make sure their assets are protected and well managed. Those services are typically reserved for clients above a certain financial threshold. 

But financial planning can benefit anyone. Learn how setting financial goals can help individuals prepare for a successful financial future. And if you have more questions, consider reaching out to a financial adviser.