At times, affluent individuals may need help from an expert to help them manage and grow their wealth while considering several other factors. Here the services of a wealth advisor come in handy.
Although most people are familiar with financial advisors and think that wealth managers are the same as financial advisors, the truth is that the work field of wealth managers is broader. If you want to know in detail about wealth management and how it works, keep reading this article!
What is Wealth Management?
Wealth management is comprehensive advice wealth managers give in finance and other related areas such as tax, accounting, estate, retirement, trust, charitable giving, and legal planning. A wealth management advisor may work with other professionals or talk directly to a professional, such as a lawyer, that you may have hired. This eliminates the hassle of going to different experts to manage your wealth better.
How Is a Wealth Manager Different From Financial Advisor?
It’s essential to note here that a wealth manager provides a more extensive range of services than a financial advisor. Generally, the services of a financial advisor may only be limited to tax, financial, and basic retirement planning and investments.
How Does Wealth Management Work?
The sole purpose of wealth management is to maintain and ensure the long-term growth of a person’s wealth. Here is how the process of wealth management may look like:
1. Data Gathering
An appointed wealth management advisor will hold a consultation session with you to discuss your short and long-term goals, vision, priorities, and values. They may also ask you how much risk you are willing to take so that they can create the right strategy for you.
After data has been gathered, your wealth manager will properly evaluate all your assets and investments while keeping your goals and risk appetite in mind to ensure your financial needs are met.
During the presentation stage, your wealth management advisor will lay out all their analysis, suggestions, and recommendations. Here, they will ensure that you thoroughly understand every aspect of the future plan, and your input is also crucial. If you think some changes need to be made, your advisor will do so and then approve the plan.
After the approval, your wealth manager will take a proactive approach to implement the recommendations to help you achieve goals related to your wealth. After every implementation stage, the results are monitored and analyzed to ensure the strategy is in line with the primary goals. As soon as the original recommendations deviate from the main goal, strategies are adjusted accordingly.
How to Choose a Wealth Advisor?
When choosing your wealth management advisor, you should consider if they work in the same field as you, as this will determine their quality of work because some wealth managers may only work with certain kinds of clients. You should also take into account their professional qualifications like CFA, CFP, or CPA, their experience, fees, methods of communication, and whether they are independent or working on behalf of a firm.