Photo by Andrew Neel

Originally Posted On:


If you’ve worked hard and are finally sitting on a bit of money, it might be time to start learning how to manage it effectively. While managing smaller amounts can be done alone, or with your standard financial advisor, sums of $1 million or more might require a more experienced hand.

You might be looking for a financial advisor who excels in financial wealth management.

Now, not everyone is going to be up for the job. People work with different tiers of wealth, and you need one suited for your situation. You’ll find that having someone else manage your wealth can end up saving you money in the long term. They’re an investment in yourself.

Managing large sums of money can be confusing and overwhelming. If you have a high enough net worth, it will save you money to give that job to someone who knows what they’re doing and how to do it well.

If you’re still unsure, read on to learn about financial wealth management and why you should consider it.

What is Financial Wealth Management?

Wealth management is a specialized subset of financial planning. This means that while all wealth management advisors are also financial advisors, not all financial advisors are wealth management advisors. It’s like the difference between being a general practitioner and being an orthopedic surgeon. They both stem from the same area, but one honed in on a specific job.

People who have a high net worth (or an ultra-high net worth) might have a lot of money in liquid assets. They may find themselves needing more help managing their funds than the average person to avoid any future problems or lost money.

A wealth management advisor will essentially guide their client in all (or specialized, depending on the advisor) avenues related to their wealth. This protects and increases the client’s assets with the expertise of the advisor.

While a financial advisor does a similar job, a wealth management advisor is more likely to know the ins and outs of high net worth issues and how to deal with them. It’s a more specialized field, and it’s likely worth the extra money to find one.

A wealth management advisor needs clients with a large net worth, but not all high net worth clients are in need of a wealth management advisor. That said, if the client has a lot of diverse needs (and lacks appropriate time to do their own research for financial management) it is in their best interest to hire someone to help.

What Does a Wealth Management Advisor Do?

Wealth management advisors work in different ways. Most of them offer a broad spectrum of services to the wealthy, allowing them to be a “one-stop-shop” for financial needs.

Others prefer to specialize a bit and hone in on one specific area of wealth management. While this might make them less appealing to the average person starting out with a wealth management advisor, someone looking to work on a specific problem or area with their money would be better off seeking out a specialist.

Some things that a wealth manager might do include:

  • Investment management
  • Retirement planning
  • Plans for charity or donations
  • Tax and accounting services
  • Estate management and planning
  • Review of Social Security benefits
  • Examination and review of healthcare
  • Help with business planning, beginning, or selling

A more “broad spectrum” wealth management advisor is going to cover facets of all of these categories, allowing their client to only need to seek out one professional. They generally work with fewer clients so they’re better able to pay attention to the few that they are managing and meet all of their potential needs.

The wealth management advisor is also going to network with other people that the client has on their team, like attorneys or accountants. This way, they can have all of the information that they need in order to efficiently manage their client’s funds without any surprises coming up later.

When you start seeing a wealth management advisor, they’re likely going to go through a several step process.

First, they’re probably going to evaluate and analyze your overall financial situation. They’ll take a look at your assets, your businesses, any investments that you have, as well as any funds.

Next, they’re going to develop a plan. They might do this alongside your other professional team members, or they might do it alone. The plan is going to include things like future investments, business management, and plans for future tax and accounting services.

Then the real part of the job begins. They implement this plan, alongside you and your team, to help you hold onto and earn more money. After they figure out a perfect financial portfolio for you, they’ll be there (or have someone there for you) to make adjustments along the way as your life or financial situation changes.

Their job is to be a leading player on your team and help you set goals for your money. Then, they lead the way in helping you follow and achieve those goals.

How Do I Choose a Wealth Management Advisor?

Picking the right wealth management advisor is important as they’re going to have access to a lot of sensitive information and they’re going to be controlling (or at least advising the use of) a large amount of your money. You need to find someone who’s well-suited to work with people in your income bracket and you need to find someone who you can trust.

While there are no specific qualifications to be a wealth management advisor, it might benefit you to look into the history of the advisor in question. There are some certifications that, while unnecessary, might help the advisor in question suit your needs. For example, some wealth management advisors have a Certified Financial Planner certification.

Most wealth management advisors started elsewhere in the financial field and worked their way into this particular niche. Many of them have a history in finance in another area, like as a more broad financial advisor that then decided to specialize in high net worth wealth management.

Asking questions of advisors that you visit while window shopping will help make your decision a little bit easier. Not all wealth management advisors are going to be in your niche.

If you’re seeking someone who specializes in a specific area, be sure to ask questions about the area in question. While many wealth management advisors are competent in all areas of financial planning, there are some jobs best-suited to a specialist.

Also, consider asking about the account minimum for the wealth management advisor. Different advisors work with different levels of monetary wealth. This advisor might be out of your range, which will make your choice very simple.

You can also ask them about the kind of clients that they typically work with. While wealth management advisors are flexible, knowing their standard client base can be helpful for knowing if they’re going to be useful for you specifically.

This is a big decision, and it’s not one you should take lightly. Take as much time as you need to find the wealth management advisor that best suits the needs of your bank account and find someone that you can trust to properly handle your money and future.

How Much Does a Wealth Management Advisor Cost?

Costs vary for financial wealth managers. Typically speaking, you’re going to be charged a percentage of your Assets Under Management, or AUM. This is the total amount of money that the wealth management advisor is managing for you. Often, this percentage is somewhere between 1% and 2%, though it may be lower if there is a very large sum of money involved.

There are variances though, although this is the norm. Some charge normal fees or fixed rates like any other service. This is something that you’ll need to discuss while vetting your future wealth management advisor and trying to figure out if they’re a realistic fit for you.

Wealth management services are geared specifically towards the incredibly wealthy, so you should expect them to be quite expensive. With that, though, they’re going to be managing your money effectively in order to protect your assets and even earn you more in the long run.

While it might seem like a large upfront cost, the benefits are priceless.

Not everyone is properly trained to manage large sums of money in a way that will keep them protected. The cost is worth it if you have a high net worth.

Because they generally take a percentage rather than a flat rate, they also gain from helping you earn more money. This should help you place a little bit more trust in them, and know that your money is going to a valuable place. If you have more money, they earn more money and everyone profits.

Why Do I Need a Wealth Management Advisor?

Wealth management advisors train specifically to work with the trials and tribulations that come with managing large sums of money effectively. Standard financial planners who work with more diverse populations in terms of financial standing are less equipped to deal with these problems.

A non-specialized financial worker also just won’t have the time to spend on your portfolio or account specifically. Many of these workers take on many more clients at a time. There are far more people who don’t meet the threshold of “high net worth”, so more people are using their services.

If you need someone to focus on you and help you navigate your financial situation, you need a wealth management advisor.

Similarly, investment bankers, who are also interested in managing and growing large amounts of funds, are really focused on companies or business entities rather than individuals. If you need someone to focus on you as an individual, you need a wealth management advisor.

Now, if you’re not a high net worth individual, you likely don’t need a wealth management advisor at this time (though you should keep them in mind for your future). They really are specialized to focus solely on the problems of the very wealthy, and you wouldn’t benefit much from their services.

If that’s the case, you might find more help from a financial advisor, or even someone more specialized in a specific field that interests you, such as a stockbroker if you’re very interested in investing.

Is it Time to Look Into Financial Wealth Management?

If your net worth is over $1 million dollars, it might be in your best interest to invest in a wealth management advisor, or at least start looking into one for your near future. Financial wealth management might seem like a needless cost, but it can save (or even make) you money in the long term.

While a financial advisor or even an accountant can probably be enough for the average person, if you have a lot of funds to work with, you want to ensure that you’re working with someone who knows how to manage them appropriately. Managing a lot of assets can be a full-time job, and some people make that their job.

A financial wealth advisor will make sure that your stock portfolio is tight, your retirement is sorted out, and any businesses that you might have under your control are making you money. If anything is out of order, it will be quickly fixed. This kind of control over one’s own financial situation is priceless.

For more information on managing finances, check out the rest of our blog. You can never know too much about saving money and bringing up your net worth.

No Comments

Sorry, the comment form is closed at this time.