You work hard throughout the day to earn money and safeguard your future financially. While you’re busy working and earning money, it becomes necessary to have someone plan and manage your finances to help you achieve your financial goals. And this is where wealth management comes in! You save money to live comfortably today, as well as have enough to sustain life when you are no longer employed. However, the money you save and the wealth accumulated can get eroded. The value of money reduces over time if not invested properly. To avoid this issue, wise individuals get wealth management services to ensure that their wealth stays safe and continues to grow.
Wealth Management – Definition
Wealth management is a specialized financial advisory service typically offered to high-net-worth individuals. A certified wealth manager provides a full range of financial services to affluent clients. Wealth management involves multiple services that are offered in a consultative way to millionaires and billionaires. From making investment decisions to estate planning, wealth management is a comprehensive service to build and manage assets and investments. This specialized financial service is provided by qualified professionals who charge a commission based on a percentage of the assets they manage.
Functions of Wealth Management
The primary function of wealth management is to help you reach your financial goals. To achieve this goal, the wealth manager performs multiple functions such as lowering debt, increasing the client’s net worth, and improving cash flow. All these functions aim at improving your financial situation by ensuring that you put more money in your pocket. From helping you plan for retirement to making better investment decisions, this consultative method helps clients achieve their goals. A good wealth manager offers comprehensive guidance on matters related to finance, taxation, estate, and legal. Working with a dedicated financial firm allows you to get the best services from estate planners, tax professionals, and legal experts to design a holistic wealth plan.
As life keeps changing, our financial goals and future plans also change. As you traverse through life, you need the assistance of an expert to ensure that your finances suit your life stage. As you reach the final stage of retirement, you need to make sure that you gave adequate money in hand. This is where a wealth management firm can help in formulating different strategies for different life stages that help you achieve goals like:
Accumulation:
Financial experts highly recommend beginning investing in your career early on. Set your priorities, create a budget, and stick to it. However, not everyone has proper knowledge of different products and market conditions. Financial advisors can help you choose the right products and make smart investment decisions. They can help you with retirement plans and diversify your investment portfolio. Investing in high-growth assets such as stocks can help you accumulate wealth.
Preservation:
Accumulation isn’t enough to safeguard your future unless you take steps to preserve wealth. Experts recommend taking health and life insurance as soon as possible. Equities and debt should be balanced in your investment portfolio. When a dedicated wealth manager guides you, it helps in taking calculated risks and preserving wealth.
Distribution:
Wealth management includes services like insurance advice, retirement planning, accounting services, risk mitigation, estate planning, charitable giving plans, cross-border tax services, education planning, and much more. The investments you make help you grow wealth by earning more in the form of interest payouts, annuities, profits, etc. Estate planning is also a part of wealth management that ensure the smooth distribution of your wealth among your heirs and beneficiaries. It protects the future of your loved ones also.
