Typically, a wealth manager has a significantly higher investment minimum than a regular financial advisor.
Wealth managersalso tend to offer more services than financial advisors. These services may include estate planning, trust services, family legacy planning, charitable gift planning, and legal planning. Wealth managers generally work with clients with a higher net worth than that of a financial planner.
They often work with professionals in related areas, such as tax professionals and lawyers, to help design a comprehensive estate planning strategy for their clients. Always ask a prospective advisor if he or she is a fiduciary. This means that they work for you and are legally obliged to act in your financial interest. There is no good reason to shoot from the hip with so much at stake.
A wealth manager can help you quantify the decision, understand the impact on other areas of your life, and evaluate your alternatives. It is often worthwhile to create a financial plan that helps with the decision-making process. For those who want to get down to business with their money, a wealth manager can still provide value by making sure they're keeping an eye on the big picture. For example, if you're an active trader but aren't exactly a tax expert, a wealth manager can help you fill that niche.
They can also act as a sounding board to help you think about your goals or decisions and educate you on new developments that you may not be aware of. The type of financial advisor you need depends on your individual situation. In general, you should consider a wealth manager if you have a high net worth and want comprehensive management of your finances.
Wealth managementis generally considered a “high-end type of service”, and some wealth management firms may require a certain level of investment assets or minimum net worth.
If you're especially concerned about limiting your wealth management fees, working with a commission-only advisor may be a great option for you. A trustee means that the wealth manager must put the interests of his clients before his own or his employers. Individual wealth managers and their company will set any minimum in terms of investable assets, net worth or other metrics. Wealth managers can also charge a one-time flat fee per task, or a fixed monthly fee that allows you to keep your services whenever you need them.
In general, wealth management involves coordinating all the moving parts of a client's financial position into a comprehensive wealth plan. Wealth management is a holistic service that focuses on helping medium to high-net worth clients increase their equity, manage their exposure to liabilities, and design strategies to transfer their wealth to their designated heirs. Some wealth advisors also specialize in financing education, using insurance, planning for business succession, and complex legal and risk issues. This table summarizes the basic differences between wealth managers, portfolio managers and financial advisors.
Stephan Dunbar III, Managing Partner of Business Strategies Group, a division of EquitableAdvisors, recommends choosing a wealth management advisor with an advanced degree and appropriate credentials. Each wealth manager or wealth management company that conducts fee-based planning will have a fee schedule for your reference. Wealth managers provide comprehensive and interdisciplinary services for their clients with a generally high net worth. Wealth management is about protecting what has accumulated and, at the same time, finding opportunities for growth.
Wealth managers who implement an AUM pricing structure charge customers a percentage of the total value of the assets they manage for that customer. .