What Is Wealth Management?

What is Wealth Management?

You have worked hard for your money, and you want to ensure it works hard for you. If you’re a high-net-worth individual, you most likely need the highest level of financial planning and advice to maximize your investment. Wealth management typically includes tax planning, investment managementestate planning and financial advice, all tailored to your specific financial situation. Wealth management services should also be flexible enough to grow with you into the future.

Learn more about wealth management, including who it’s for, why you might need it and who to work with.

Table of Contents:

What Is Private Wealth Management?

Wealth management or private wealth management is a financial advisory service for affluent individuals. It combines multiple financial services into one package, personalized to your needs and assets. Often, wealth management is adaptable, and a dedicated wealth manager will adjust a client’s portfolio and financial plan as time goes on.

One way to understand wealth management is as a holistic approach to your finances. It goes beyond investment advice, strategy, tax preparation and retirement planning. Wealth management helps someone handle their assets in the present while keeping future needs in mind. 

Usually, people who benefit the most from wealth management have saved a significant amount of money. Some wealth managers have minimum investment requirements. This threshold depends on the type of services you need and the company you choose to work with. 

Wealth management companies are often fiduciaries, which means they must put their clients’ needs front and center. A wealth manager who is a fiduciary has to follow a code of ethics and needs to make investment recommendations in their clients’ best interests. 

One way to tell if a wealth management company is a fiduciary is to look at its fee structure. A company that earns a commission on investments and sales of financial products might recommend those products, even if they might not benefit the client. A company that charges a flat fee for service doesn’t have a financial incentive to recommend specific products and is more likely to be a fiduciary.

The Value of Wealth Management

The Value of Wealth Management

Wealth management is essential for affluent or high-net-worth individuals for a few reasons.

  • It provides a big-picture look at your finances: Wealth management is more than getting investment advice. It usually involves developing a comprehensive financial strategy for clients that includes tax planning and estate planning. It can also encompass health care cost planning and charitable giving planning.
  • It can help transfer wealth: Affluent individuals are usually concerned about the estate tax, a tax on a property transfer after a person’s death. Legacy planning can be part of wealth management. It helps your family and loved ones avoid large tax bills after you pass on. It also ensures your designated beneficiaries inherit your assets.
  • It can improve your tax situation: Taxes look different at various life stages. As you approach retirement, you most likely want to ensure you only pay the necessary taxes on any income. A wealth manager can provide you with personalized guidance on structuring your retirement income to minimize your tax burden.

What’s a Wealth Manager?

A wealth manager provides wealth management services to affluent people, including investment advice and tax planning. Wealth managers typically aim to help their clients increase their wealth and net worth over the long run. Some people confuse wealth managers with financial advisers, but there is a difference. A financial adviser can be anyone who provides expert financial services, such as a certified public accountant or a financial planner. A wealth manager is a specific type of financial adviser who usually offers financial management and advice to people with many assets.

Some wealth managers have received licenses or certifications that demonstrate their commitment to their clients’ needs and to providing the best service possible. For example, a wealth manager might be a certified financial planner. A CFP® has demonstrable experience and has promised to follow ethical standards. 

What Do Wealth Managers Do?

Wealth managers’ typical list of offerings can be long. You might not need every service your wealth manager provides, or you might find that everything they do aligns with your goals and helps you on your path. Here are some of the services a wealth manager typically provides.

  • Investment management and adviceA wealth manager will buy stocks and other investments to maximize clients’ wealth and get a high return on investment. While a wealth manager can’t guarantee specific stocks, they can make decisions and recommendations based on what they believe is their clients’ best interests.
  • Tax planning: Wealth managers help clients manage their income and tax situation. For their retired clients, a wealth manager can advise on withdrawing from accounts to make the most of taxes.
  • Estate or legacy planning: A wealth manager can also work with clients to help reduce the tax burden after their death or to ensure their beneficiaries get the maximum benefit from their estate.
  • Health care costs planning: Health care expenses in retirement can be high, depending on the medical conditions and insurance coverage someone has. A wealth manager can help clients plan for health care costs as they get older. 
  • Business planning and management: Wealth management isn’t only for individuals. A wealth manager can work with a business owner to maximize their company’s assets and wealth.
  • Philanthropic planning: A wealth manager can also work with individuals to help them create a plan for charitable giving that benefits the giver and the recipients.
Schedule a call with Nova Wealth Management

Schedule a Call With a Wealth Management Adviser at Nova Wealth Management

If you need help planning for retirement, taxes or your legacy, the wealth managers at Nova Wealth Management are here for you. With offices in both Florida and Illinois, and servicing clients all over the world, you can schedule a meeting with us today to learn more about our services and how we can work with you to help you feel confident about your finances.

About the Author

Picture of Amy Novakovich, CFP®, CRPC®

Amy Novakovich, CFP®, CRPC®

Amy is a Co-Founder of Nova Wealth Management. She is a native of Wisconsin and moved to Florida in 2004. She earned a degree in finance from Florida Gulf Coast University. Amy is a CERTIFIED FINANCIAL PLANNER™ professional (CFP®) and a Chartered Retirement Planning Counselor® (CRPC®).

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