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Investing Insights - What is Wealth Management?

Updated: Sep 3, 2022

The term Wealth Management means different things to different people. Wealth management is, by definition, a holistic approach to understanding and providing solutions to all of the major financial challenges of an investor's financial life.

From a client family's perspective, this means having all financial challenges solved.

There are three essential components to true wealth management: 1. A consultative process to gain a detailed understanding of family's goals and their most significant financial wants and needs.

2. Customized choices and solutions including investment management, insurance, estate planning and retirement planning.

3. Delivery in close consultation to identify clients’ specific needs and how those needs change over time as well as proactively design solutions around those needs.

In its simplest terms, wealth management can be summed up using a single, all-encompassing formula:

Wealth management = investment counseling + advanced planning + relationship management (or WM = IC + AP + RM)

Investment counseling is the core offering and the foundation upon which the client relationship begins. Advanced planning addresses four key areas of financial needs that affluent investors have beyond investments: wealth enhancement, wealth transfer, wealth protection and charitable giving.

Relationship management focuses on three areas: fully understanding and meeting clients' critical needs over time; assembling and overseeing a network of financial experts to help meet client needs; working effectively with affluent clients' other professional advisors, such as their attorneys and accountants.

Wealth management breaks the familiar mold in which affluent individuals must contract with a range of professionals, each specializing in a single area: the investment advisor managing portfolios, the insurance agent selling life insurance, the accountant handling taxes and the attorney taking care of estate planning.

As high-net-worth individuals and families’ finances have grown ever more complex, this compartmentalized approach has become less appealing to those wishing to streamline their affairs.


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