Wealth management
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[edit] Definition
Wealth Management is a term that originated in the 1990s in the US with the Broker Dealers, Banks, and Insurance Companies. Wealth Management has generally evolved from high net worth financial consulting for persons who are top clients of any firm. Wealth Management is classified as an advanced type of financial planning that provides individuals and even families with private banking, estate planning, asset management, legal service resources, trust management, investment management, taxation advice, and portfolio management. Thus, wealth management encompasses asset management, client advisory services, and the distribution of investment products. The usefulness of and the need for wealth management is inherent in its name. Whereas financial planning can be helpful for individuals who have accumulated wealth or are just starting to accumulate wealth, you must already have accumulated some wealth for the wealth management process to be effective.
Persons engaged in wealth management usually work for law firms, accounting firms, brokerage firms, large banks, trust departments, or investment and portfolio management firms. Smaller firms such as Registered Investment Advisors also tend to provide a wide array of family office services.
Wealth management is a high level form of private banking that provides various types of investment, insurance and bank products and services. With the repeal of the Glass-Steagall Act in 1999, financial firms were finally able to provide all three of the above services from the same offices. With the emergence of wealth management as a career opportunity as well as a professional service in high demand, educational programs such as the New York University certificate program, and the American Academy of Financial Management CWM Certified & Chartered Wealth Manager program are providing customized wealth management executive training to corporations and individuals alike.
As wealth management serves a much more affluent community, many government licensed lawyers, CPAs, Chartered and Certified Wealth Managers and sometimes an insurance professional who is a CFPs are involved in this type of high-net-worth consulting. Keep in mind that only Lawyers and CPAs have a government license to provide legal or tax advice on complex wealth management, estate planning, tax law, retirement or other legal issues such as business succession or divorce. As a note, an RIA (registered investment advisor) with the SEC or a person holding a RIA license can charge fees for investment advice.
[edit] Client Segmentation and Management
Target clients of Wealth Management are typically known as "High Net Worth Individuals" or "Mass Affluent" retail banking customers. Many banks define these target clients as having a minimum Net Worth or Asset Base which make them attractive customers for retail banks. Target clients in this space typically have a net worth (or positive asset base) of somewhere from between US$150,000 and US$1,000,000 ($1 million). Whereas Private Banking clients typically have a net worth of greater than US$5,000,000 ($5 million).
[edit] Services
Services typically include:
- Portfolio Management and Portfolio Rebalancing
- Investment Management and Strategies
- Trust and Estate Management
- Private Banking and Financing
- Tax Advice
- Family Office Structures and Management
[edit] Products
Products could include the following:
- Stocks and Stock Trading
- Equity Linked Investments
- Structure Savings Products
- Structured Investment Products and Derivatives
- Foreign Exchange
- Mutual Funds and Unit Trusts
- Property Management and Investment
- Alternative Investments including:
- Art
- Wine
- Precious Metals
- Property
