A wealth manager is usually characterized by their clientele – high net worth individuals. That characteristic of wealth managers (who they work with) has far-reaching ramifications. Because they usually work exclusively with high-net-worth individuals, wealth managers have a specialized understanding of the unique challenges, decisions, and risks of their clientele.
When working with a wealth manager, it can be comforting to know that you’re dealing with someone who has experience with situations like the ones that you’re facing. So what services can you expect if you’re working with a wealth manager?
The Role of Wealth Managers
There’s no one definitive checklist of the services that a wealth manager will provide to each person. Ultimately, the services that a wealth manager provides depends upon the client’s needs. Services can vary from client to client, but some examples of what they might include are investment management, financial planning, tax services, retirement planning, legal planning, and estate planning (to name just a few).
The idea is that a wealth manager will wear many hats. In a single meeting with you, they may be an investment planner, retirement planner, financial troubleshooter, and consultant. They are like a one-stop shop for all your financial needs, allowing you to work with a primary advisor who understands your overall goals and can facilitate connections to required industry experts to take care of your needs. The role of a wealth manager is to reduce the complexity of life for their clients.
With that in mind, let’s take a more in-depth look at some of the services that you can expect when working with a wealth manager (keeping in mind that your needs may differ, and a good wealth manager will adapt to your needs).
Financial Planning
Financial planning is a broad term that encompasses a host of topics. A wealth manager can sit down with a client to assess their wants and their situation, and from that discussion, tailor a personalized strategy that may include a range of financial products and services. The wealth manager will develop a plan for the client, taking into account the individual’s financial situation, goals, and risk tolerance. The idea is to have an overarching “master plan”, with everything being done working towards the same goal.
A single wealth manager can coordinate all the services needed to carry out the client’s financial plan, even if they don’t specialize in each area. They may receive input from outside financial experts to create the optimal strategy to benefit the client. Because there can be so many parts, and things will change over time, a wealth manager’s job doesn’t end once everything is initially put into place. Even after developing the original plan, constant diligence is required in case goals need to be updated, investments reviewed, or additional services needed.
Investment Management
As the name “wealth manager” suggests, one of the reasons to hire a wealth manager is to manage an individual’s wealth, especially for growth. Many high-net-worth individuals don’t have the time or the desire to actively manage their money, but they don’t want to necessarily invest in a passive ETF. They want someone who is actively looking after their investments, making sure that each one is appropriate for their situation.
It’s no surprise that the first thing that comes to many peoples’ minds when they think of a wealth manager is investment management. A high-net worth individual has much to lose and much to gain, based upon how their investments are managed. An excellent wealth manager will take the time to understand a client’s risk tolerance so that the investments are appropriate for the client. In addition, the investments should be structured so that the client has adequate liquidity for times when there is a sudden need for cash. An excellent wealth manager will think through all of this for the client as they select appropriate investment vehicles.
Tax Services
Gone are the days of waiting until the April 15th tax deadline approaches before many investors think about taxes. Tax planning is no longer an event, it’s a year-long (and life-long process). Having someone help you plan the process can aid in minimizing the taxes you pay.
The tax services that a wealth manager provides aren’t just tax preparation (that’s something that they are likely to refer you to someone who specializes in the matter). It’s a process of examining your entire financial picture and providing you recommendations on ways to avoid or delay paying taxes. We’re not talking about tax evasion – we’re talking about tax minimization.
The amount of money that high-net-worth individuals can lose due to taxes during their lifetime (and even after death) can be a staggering sum. While having a high net worth allows additional investing opportunities, complex business and real estate income scenarios require specialized service to help manage the tax consequences. Wealth managers can help guide you through the often-confusing opportunities that exist in the tax code that allow you to grow and preserve your wealth while at the same time minimizing your tax obligations.
Retirement Planning
There’s more that goes into retirement planning than just “max out your 401(k) contribution” or “contribute the allowable amount to an IRA”. That can certainly be part of retirement planning, but as with everything else, more goes into it than that. There’s the savings that you do while you’re working, but there’s also looking down the road and making sure that you’re on the right track for your long-term goals.
Wealth managers can help guide you through the process of positioning yourself for retirement. They’ll look beyond the income portion of retirement to get a better picture of whether you’re on the right track (and steps you may need to take if you’re not). Services that a wealth manager can provide include assisting in the investment of your retirement accounts, projecting monthly expenses and income once you’re retired, and setting the framework so that your wealth is available and working for you once you decide to stop working.
Legal Planning
There can be a myriad of reasons why you might need legal advice, and a good wealth manager will know where to direct you. Whether it’s the process of setting up a business, drafting legal documents, or providing guidance through the maze of laws and regulations, assisting in legal planning has become a necessary part of a wealth manager’s job.
Not every wealth manager is qualified to dispense legal advice, but what they can do is refer you to firms that they have worked with to guide you through legal situations. Once again, the wealth manager’s experience is the key here. Putting you in touch with the right people is part of their job, and it can help relieve you of the responsibility of trying to do the research to figure out where you should go.
Estate Planning
The goal of estate planning is to transfer assets both effectively (as intended) and efficiently (in the most cost-effective way possible). Wealth managers can assist you in the process of making sure your estate is set up to make the transition as smooth as possible.
One goal of estate planning is to minimize the loss of wealth to taxes, and wealth managers are well versed in opportunities to pass along assets as efficiently as possible. The sooner you start estate planning, the better chance that your wishes can be carried out to completion. Planning now to create and preserve generational wealth can provide opportunities for your children and grandchildren.
Getting Started with a Wealth Manager
Because each wealth management firm has different minimum requirements for clients, don’t assume that your situation precludes you from accessing wealth management services. Most firms will be happy to sit down with you for a complimentary initial consultation, and during that time, you can get a better idea of whether a wealth manager is right for you.
About Chase Investment Counsel
Chase Investment Counsel is a family and employee-owned boutique wealth management firm that offers personalized investment services. Our clients include career professionals, those nearing or in retirement, and families experiencing financial transitions such as generational wealth transfer, widowhood, divorce or sale of a business. Chase’s active, disciplined investment management team is focused on selecting individual stocks and bonds targeted to each investor’s specific financial goals and risk tolerance. Established in 1957 in Charlottesville, VA, Chase Investment Counsel manages approximately $300 million in assets.