What Does a Wealth Manager Do?

Wealth Manager Overview

Wealth managers are engaged in financial advising services that combine investment advice with other financial services to meet the demands of wealthy clients.

An experienced wealth manager typically offers a wide range of services, from traditional financial planning to more innovative options such as investing in alternative markets, venture capital, private equity funds, and hedge funds

They may also provide tax planning advice, estate planning services, retirement planning advice, risk management solutions, and other related services. 

Individual wealth managers and their organizations will set any minimums regarding investable assets, net worth, or other measures. However, a minimum of $2 million to $5 million in assets is required to consider the services of a wealth management firm.

The credentials possessed by a wealth manager can include any of the following: Certified Investment Management Analyst (CIMA), Certified Private Wealth Adviser (CPWA), and Certified Financial Planner (CFP).

Wealth Manager Duties

Wealth managers are responsible for various tasks that help their clients reach financial success.

Analyze Financial Information

Wealth managers review financial objectives, risk tolerance, and existing asset allocation. Similarly, they examine current securities and portfolios while researching potential investment options.

Advise on Financial Products and Services

They advise on various financial products and services based on their client’s needs. These may include investments such as stocks, bonds, or mutual funds, insurance policies, banking services such as savings accounts or certificates of deposit, and other options. 

Cultivate Client Relationships

They must take the time to get to know their clients, provide them with the best possible advice, build a trusting relationship with each client, and understand their individual needs, goals, and values. 

Develop Comprehensive Strategies

After gathering and providing advice on various products, wealth managers must also be able to develop comprehensive plans that address their client’s goals. The plan can include investment strategies, retirement planning, tax planning, debt management, estate planning, and more. 

Manage Assets and Set Up Investments

This includes selecting appropriate investments, ensuring they are diversified, monitoring performance, and adjusting allocations accordingly. Wealth managers must grasp various investment strategies to ensure their clients’ portfolios meet their goals.

Collaborate with Advisors

Finally, wealth managers must work closely with other advisors, such as accountants or attorneys, to provide their clients with comprehensive financial advice. They should be able to collaborate effectively with these professionals to serve their clients’ best interests.

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Wealth Manager Services

Wealth managers provide a wide range of services that help clients achieve their financial goals. They must thoroughly understand these wealth management areas to provide comprehensive strategies tailored to each client’s needs.

Investment Management

Investment management starts with analyzing a client’s financial situation through personal financial statements or a business’ income statements, balance sheets, and cash flow statements. They will then use this data to create customized plans and strategies that best suit their clients’ objectives. 

Financial Planning

Smart goal setting is a critical component of financial planning. Data is then collected to study and evaluate your financial situation. You can then implement it. It is essential to monitor the strategy constantly to make the required adjustments to achieve your goals.

Tax Planning

They must know various tax laws and regulations to help their clients reduce their overall tax burden. They should also understand how to take advantage of any available deductions or credits for which their clients may qualify.

Estate Planning

This can include setting up trusts, creating wills, or preparing advance directives to ensure that assets are passed down according to the client’s wishes.

Risk Management

It is essential to be able to identify risks in a client’s portfolio and develop strategies to minimize them. This includes understanding different types of investments and how to allocate assets to mitigate risk while maximizing returns.

Retirement Planning

Wealth managers provide advice on retirement planning, such as setting up 401(k) plans or Individual Retirement Accounts (IRAs). They must understand various investment vehicles, tax laws, and regulations to help their clients develop long-term financial plans for retirement.

Legal Planning

They can help clients create and execute appropriate documents, such as trusts and wills to protect their assets and pass them down according to their wishes.

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Factors to Consider When Choosing Wealth Managers

When choosing a wealth manager, it is essential to consider several factors.

Fiduciary Responsibility

You can check with the Securities and Exchange Commission (SEC)’s search tool to determine if your advisor is a fiduciary. Fiduciary duty ensures that your wealth manager will act in your best interests when making decisions about your money.

Breadth & Expertise in Products or Services

A quality wealth manager should have a broad knowledge base and expertise in various products and services, such as investments, insurance policies, banking services, tax planning, estate planning, risk management, legal planning, and trust services. 

Types of Clients

Are they able to serve individuals, or do they specialize in corporate clients? Do they provide services for high-net-worth individuals, or are they more suited for those with modest assets? 

Such questions will help you determine if the wealth manager is the right fit for you.

Investment Philosophy

It is important to understand the investment philosophy of the wealth manager and make sure it aligns with your goals and values. It would help if you also inquired about any processes that have been put in place to monitor investments on an ongoing basis.

Fees

It would help to ask about fees before engaging a wealth manager. Most charge a percentage of assets under management, but some may also offer flat fees. Understanding the fees charged and how they will be structured before entering an agreement is essential.

Availability

Finally, it is essential to know how accessible the wealth manager is and what forms of communication are offered. Make sure that you can easily reach them with any questions or concerns.

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Final Thoughts

A wealth manager is a type of financial advisor that provides wealthy individuals and families professional advice on investments, tax planning, estate management, insurance coverage, philanthropic giving, and other long-term financial strategies

Ultimately, by working closely with a trustworthy, qualified wealth manager who understands clients’ needs and goals, high-net-worth individuals can better protect and increase their assets over time.

Some factors to consider when choosing wealth managers are fiduciary status, expertise, clients served, investment philosophy, fees, and availability.

What Does a Wealth Manager Do FAQs

A wealth manager is a financial professional who provides comprehensive advice to wealthy individuals and families on managing their finances. They help clients meet their goals by providing strategies for tax planning, investments, estate planning, retirement planning, and more.
A wealth manager can be a great asset for individuals looking for comprehensive financial advice. A quality wealth manager will provide personalized strategies tailored to your individual needs and goals to help you achieve financial success.
It is a good idea to consider using a wealth manager if you are looking for comprehensive financial advice. A wealth manager can help ensure that your finances are well-managed and aligned with your goals. They will be able to provide strategies tailored to your individual needs and help you make sound financial decisions.
Wealth managers typically charge a percentage of assets under management (AUM) or a flat fee for their services. Understanding the type of fees, you will be charged before entering an agreement with a wealth manager is essential.
Wealth managers should possess a wide range of skills, including financial analysis, portfolio management, communication, and interpersonal skills, problem-solving abilities, investment analysis, and research capabilities. They should also have an in-depth understanding of the financial markets, tax laws, and regulations. Additionally, they should be well-versed in accounting principles and estate planning.

True Tamplin, BSc, CEPF®

About the Author
True Tamplin, BSc, CEPF®

True Tamplin is a published author, public speaker, CEO of UpDigital, and founder of Finance Strategists.

True is a Certified Educator in Personal Finance (CEPF®), author of The Handy Financial Ratios Guide, a member of the Society for Advancing Business Editing and Writing, contributes to his financial education site, Finance Strategists, and has spoken to various financial communities such as the CFA Institute, as well as university students like his Alma mater, Biola University, where he received a bachelor of science in business and data analytics.

To learn more about True, visit his personal website, view his author profile on Amazon, or check out his speaker profile on the CFA Institute website.