What is Wealth Management

What is Wealth Management and How Does it Work?

Wondering what is wealth management? In simple words, it is a branch of financial services that deals with the financial needs of affluent investors and high net worth individuals. Wealth managers perform a number of tasks ranging from investment advice, taxes, estate planning to anything else that relates to increasing the wealth of high net worth individuals.

Let’s see what is wealth management is, how it works and what are its advantages?

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What is Wealth Management?

Wealth management is not limited to investment advice, it combines financial planning and investment strategies to grow the wealth of individuals. Be it retirement planning, taxes, estate planning or more, all are covered under wealth management.

People having millions or billions often face complex tax issues, portfolios and encounter other problems related to wealth that are totally different from those of the common investors.

wealth manager responsibilities

Wealth managers are responsible for:

  • Accounting and tax services
  • Investment management and advice ( retirement planning)
  • Legal and estate planning
  • Charitable plans
  • Selling or starting a business

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How Does Wealth Management Work?

Wealth management is not similar to regular financial advisory services, here the wealth managers get a percentage of the assets they manage for affluents. The percentage or fee of a wealth manager can differ based on the firm or the accounts of wealthy individuals and families. Typically, the percentage charge in wealth management starts from 1% of assets that are managed.


What are the Advantages of Wealth Management?

Here are some of the benefits of wealth management:

  • Wealth management plans are tailored to the specific needs of private clients to grow their wealth.
  • Sensitive and confidential information is protected during the management process.
  • You get regular updates of how your investments are performing,
  • Wealth manager offers a bulk of services ranging from accounting, tax, estate and retirement planning to investment advice, so wealthy individuals get a whole bundle of financial services.
  • Direct access to the wealth manager builds trust and ensures accountability.
  • Wealth management is a holistic approach to monitor and manage the finances and to avoid risks of wealthy clients, businesses and focuses on their future needs.
  • It saves a lot of time and hassle.
  • It best suits affluent individuals who have a wide range of investments, and it is only performed by highly experienced professionals in the field.
  • A wealth manager can do his/her work individually or as a business.


Is Wealth and Asset Management the Same?

There are a lot of similarities between the both, but these vary to a great extent. Wealth management is a broader practice than asset management. As evident by the name, asset management solely focuses on assets like stocks, bonds, cash etc. Whereas, wealth management covers all aspects of wealth from assets, accounts, taxes to ownership and legacy issues.

Assets management can be done for an average individual. On the flip side, wealth management only deals with the wealth of affluent individuals and businesses. In addition, asset management focuses on how assets are utilised at their best to get the most out of them.


Quick Sum Up

With that being said, you have got a basic overview of what is wealth management, how does it work, and how it is advantageous for high net worth individuals. Wealth management is a broad term that encompasses all the financial and investment strategies to grow the wealth of affluent individuals. From investment advice, legal and estate planning, accounting and tax services to retirements and charity plans, a wealth manager performs all these services.


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Disclaimer: This blog contains general information on wealth management.


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