What is wealth management?

Wealth management can help you safeguard your future, achieve long-term goals and preserve your financial legacy. But what exactly is wealth management? And how can it prove beneficial?

Wealth management can involve one or more professionals overseeing a person’s finances to help them reach their wealth goals. This includes expertise such as in-depth planning for the future, strategizing taxes, preparing for retirement, and organizing estate matters. 

In this article, we explore the benefits of wealth management before examining the comprehensive array of services it entails and essential strategies it offers, including diversification and risk management.

We also look at the many advantages wealth management provides for high-net-worth individuals looking to protect their wealth for generations to come. From goal setting, estate planning and investment strategies, to various other benefits in between, this article offers a comprehensive look at wealth management.

Understanding wealth management

Wealth management is a specialized approach dedicated to helping high-net-worth individuals safeguard and grow their wealth by providing a wide range of financial advice and services. Those services include investment management, financial planning, tax strategy and planning, retirement and estate planning and other financial matters.

Wealth management professionals are often hired to help achieve these goals, based on an individual’s personal situation. These experts play an important role in easing the burden of dealing with financial matters while clients juggle other needs, such as running a business, managing their family and careers or pursuing their philanthropic endeavours. In this way, wealth management helps people strategically grow their wealth while creating a strong foundation for the next generations.

When should you get started with wealth management planning?

You should consider engaging a wealth management professional when your financial situation and goals become more complex and wealth increases.  It’s considered a good idea to retain a wealth manager if you’re going through a transitional period in your life – e.g., starting a business, buying or selling a home, or retiring or engaging in succession planning. Moreover, if you have recently accumulated wealth and feel you lack the expertise to manage your more complex financial future, an expert can come in handy. Similarly, if you don’t have the time or energy to manage your wealth on your own, a wealth management professional can take the burden off your shoulders and provide you with peace of mind.

While there is no strict rule on how much money you need to obtain these services, $1 million+ in assets is typically the minimum suggested to get started. That said, exceptions are often made if the situation warrants it. A child of a high-net-worth client, for example, may engage a professional to ensure their inheritance is safeguarded.

The benefits of wealth management

Because wealth management includes a wide range of tailored services designed to meet a person’s individual needs, it goes without saying that one of the key benefits of having a wealth professional by your side throughout the process is the peace of mind they offer.

A professional with broad expertise will assess your financial situation and offer solutions to help grow your wealth while protecting it into the future. Armed with that invaluable assistance, other benefits of wealth management include:

Driving strategic goals through financial clarity

Wealth management provides a clear understanding of an individual's financial state through a detailed assessment of income, expenses, assets, and liabilities. This comprehensive overview enables informed decision-making, goal setting, and improved financial planning. By gaining detailed insight into your financial position, a professional can identify areas for improvement and establish achievable goals.

Highly customized approach to growing and preserving your wealth

Wealth management offers a personalized approach that considers factors such as investment risk tolerance, financial objectives, personal values, and future aspirations to develop a comprehensive plan tailored to you. Customized strategies can take shape through the development of a well-diversified investment portfolio aligned with your risk appetite and long-term objectives, or implementing tax-efficient techniques to enhance wealth preservation and growth.

Simplification of monthly bill payments and review of financial statements

Some wealth management services include assisting in simplifying monthly bill payments and financial statement review by centralizing expenses and automating transactions. In addition, wealth professionals provide valuable insights and recommendations during regular financial statement reviews, assisting clients in optimizing their financial decisions and achieving their goals. This integrated approach saves time, minimizes administrative burdens, and enhances financial transparency and accountability for clients.

Enhancing family financial security

Wealth management extends beyond growth to include critical measures for ensuring the security of your family and future generations. With the guidance of a wealth management professional, you can develop a strategic plan to safeguard current assets and establish a legacy of enduring financial stability. This can involve leveraging tools such as trusts, insurance, savings accounts, investments, and retirement plans to provide long-term security and seamless intergenerational wealth transfer while mitigating potential risks.