What Is Wealth Management And Do You Need It? | Bankrate (2024)

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Wealth management is a comprehensive service focused on taking a holistic look at a client’s financial picture, including services such as investment management, financial planning, tax planning and estate planning.

Wealth management is generally considered a “high-end” type of service, and some wealth management firms may require a certain level of investment assets or a minimum net worth. For clients who need this level of service, it can be useful to consolidate all types of financial advice in one place with just one firm.

Key wealth management objectives

The objectives of wealth management will vary depending on the investor. Each client’s needs and situation are different, and good wealth advisors will tailor their advice accordingly.

Some key wealth management objectives for clients include:

  • Setting financial goals and designing strategies to achieve those goals
  • Helping clients maintain and maximize their wealth
  • Managing their investments and finances
  • Reducing the tax impact of wealth building
  • Setting strategies for passing on their wealth, also known as estate planning

What is wealth management?

Wealth management is a holistic service that focuses on helping mid- to high-net-worth clients grow their money, manage their liability exposure and devise strategies to pass their wealth on to their designated heirs. Wealth management services take a comprehensive approach to the financial situation of higher-net-worth clients, versus working with an advisor focused solely on financial planning or investment management.

Some typical services offered by wealth management firms include:

  • Investment management and advice
  • Comprehensive financial planning
  • Tax planning and accounting services
  • Estate planning
  • Philanthropic planning
  • Legal services
  • Retirement planning

Some of these services may be offered in conjunction with an outside partner, however. Legal services are a prime example.

How much money is required for wealth management?

There are no hard and fast rules regarding how much is required for an investor to obtain wealth management services. Any minimums in terms of investable assets, net worth or other metrics will be set by individual wealth managers and their firms.

That said, a minimum of $2 million to $5 million in assets is the range where it makes sense to consider the services of a wealth management firm. Much below that and it might be hard to justify the expense of this type of service.

Again, these minimum levels will vary by firm. They may also vary a bit by your circ*mstances. For example, a wealth manager may want to take on the children of some of their current larger clients to help ensure the wealth they inherit stays with their firm. They may also want to establish solid relationships with younger professionals such as doctors or attorneys to retain their business once they start to earn much higher incomes.

How to choose a wealth manager

When choosing a wealth manager to work with, you’ll want to look at several things.

First, does the wealth management firm work with clients like you? Some wealth managers may focus on clients of a certain type, such as doctors or lawyers. If your situation doesn’t fit with that type of client, then that particular wealth manager may not be a good fit for you.

Second, you’ll want to look at the manager’s qualifications. Here are some questions to consider when selecting a wealth manager:

  • What professional designations do they hold? Examples might include CFP (Certified Financial Planner), CPA (Certified Public Accountant), CFA (Chartered Financial Analyst).
  • What is their level of experience in the wealth management space?
  • What services does the firm offer?
  • How often do you expect to communicate with them?
  • What types of fees do they charge?
  • Are they independent or part of a larger firm?

This table summarizes the basic differences between wealth managers, portfolio managers and financial advisors.

A wealth manager provides comprehensive, holistic advice in a broad range of financial and related areas.These include: Investments Tax and accounting services Estate planning Retirement planning Comprehensive financial planning Legal and estate planning PhilanthropyA portfolio manager is focused on investment management and generally doesn’t offer advice or services in other areas.This professional focuses on: Selecting investments Portfolio management Tax-loss harvesting Cash managementFinancial advisor is a term that can encompass a number of services. Financial advisors often provide advice on investments, financial planning, retirement planning and other related areas.This professional focuses on: Financial planning Basic retirement planning Tax planning Investments

Wealth management strategies

Wealth management strategies will vary based on the specific needs of the client. Overall, the reason to use a wealth management firm is to seek strategies to help maintain and grow your total wealth. This can mean different things to different people. Some individuals are more focused on keeping their wealth than growing it, for example, and so the wealth manager would design safer strategies focused on that objective.

In general, wealth management entails coordinating all the moving parts of a client’s financial situation into a comprehensive wealth plan. This might include the client’s tax situation, investments and retirement planning.

Examples of wealth management strategies include:

  • Developing a comprehensive investment strategy covering all of the client’s various types of investment and retirement accounts.
  • Coordinating an optimal tax planning strategy into their wealth planning.
  • Ensuring that the client’s estate plans reflect their desires.
  • Developing a succession plan for business owner clients.

How to find a wealth manager

Once you’ve determined that you need a wealth manager to help you navigate your financial needs, you’ll need to find a few firms to meet with before deciding which one you’ll hire. Finding a wealth manager can be a daunting task. Some areas have dozens of firms to choose from and narrowing down the list can be tough, while other areas may not have any firms nearby.

Here are some tips for finding a wealth manager in your area:

  • Check with friends and family to see if they use a wealth manager and can recommend one to you. They can also provide an honest assessment of their firm’s service.
  • Financial publications sometimes provide annual lists of the best wealth management firms in a given area. Consider checking these sites to find a highly ranked wealth manager near you.
  • Bankrate’s financial advisor matching tool can also help you identify advisors who may be able to provide wealth management services.

Alternatives to wealth management

If the fees or asset minimums required by most wealth management firms seem too high for you, your situation is probably not a good fit for a wealth manager. However, there are other options for getting financial advice:

  • Empower is an online advisory and wealth management firm that offers a number of services with lower minimums and fees than a traditional wealth management firm.
  • Vanguard Personal Advisor Services is a service offered by Vanguard that provides advice and planning to clients.

There are a number of other online financial advisory services and apps that offer a range of services, from very basic financial advice to some aspects of what would be considered wealth management. Robo-advisors have grown in popularity in recent years and might offer a lower-cost alternative if you are not yet at a place financially where the service of a traditional wealth management firm is feasible for you.


  • Wealth managers provide holistic financial advice to help their clients grow and protect their wealth. This advice goes beyond just providing advice on a client’s investments or designing a financial plan for them. Wealth managers generally work with clients with a higher net worth than a financial planner might. They often work with professionals in related areas such as tax professionals and attorneys to help design a comprehensive wealth-planning strategy for their clients.

  • Wealth managers may be paid in a variety of ways. Two common compensation methods are a flat-fee arrangement or compensation based on a percentage of client assets under management.

  • Financial planner is a term that can mean a lot of things. Financial planners usually focus only on doing financial planning for their clients. Wealth managers provide comprehensive, cross-disciplinary services for their generally high net worth clients. Financial planning is just a first step in most cases. Wealth managers integrate this with tax planning, investment advice, estate planning and other services to help clients achieve their goals.

Bottom line

Wealth management is all about safeguarding your future, achieving your goals and preserving your legacy. Many people don’t have the capital needed to meet with a wealth manager, but for those who do, this service can provide a host of long-term benefits.

What Is Wealth Management And Do You Need It? | Bankrate (2024)


What Is Wealth Management And Do You Need It? | Bankrate? ›

The objectives of wealth management will vary depending on the investor. Each client's needs and situation are different, and good wealth advisors will tailor their advice accordingly. Some key wealth management objectives for clients include: Setting financial goals and designing strategies to achieve those goals.

How to answer why you want to work in wealth management? ›

The external rationales that you bring up when asked "Why wealth management?" should revolve around how you enjoy coming up with creative, intricate solutions to the challenges that your clients face now and that they are liable to face in the future.

What is the meaning of wealth management? ›

Wealth management is an investment advisory service that combines other financial services to address the needs of affluent clients. A wealth management advisor is a high-level professional who manages an affluent client's wealth holistically, typically for one set fee.

Why should you be interested in wealth management? ›

You have the ability to make a positive impact in your clients' financial future. Wealth management offers a favourable work/life balance. This field is often attractive to entrepreneurs. Wealth management can increasingly be performed remotely; reducing travel requirements.

Why do people do wealth management? ›

Key objectives in wealth management

Still, the general strategies used in wealth management are designed to: Help you grow and protect your wealth while minimizing risk. Set and develop strategies to meet your financial goals.

What is wealth management and do you need it? ›

Wealth managers provide holistic financial advice to help their clients grow and protect their wealth. This advice goes beyond just providing advice on a client's investments or designing a financial plan for them. Wealth managers generally work with clients with a higher net worth than a financial planner might.

How do I prepare for a wealth management interview? ›

a) Understand the firm's history, values, investment philosophy, and target clientele. b) Research the specific role's responsibilities, required skills, and expectations. c) Demonstrate your knowledge of the firm's products, services, and industry trends.

What is wealth management in layman terms? ›

Wealth management is a branch of financial services dealing with the investment needs of affluent clients. These are specialised advisory services catering to the investment management needs of affluent clients.

What is the aim of wealth management? ›

Wealth management aims to align financial strategies with the client's unique goals, needs, and risk tolerance, while also considering factors such as market conditions, regulatory changes, and economic trends.

What is the core of wealth management? ›

At its core, wealth management means the thorough management of an individual's or entity's finances. It encompasses multiple strategies and techniques designed to aid individuals or entities in the augmentation, safeguarding, and strategic distribution of their wealth.

What skills are most important for wealth management? ›

Confidence, resilience and active listening can be crucial to becoming a wealth manager. Communication: Working as a wealth manager requires confidence and the ability to hold meaningful conversations with clients. Active listening skills help wealth managers understand their client's needs and advise them.

What do clients want from wealth management? ›

Bottom Line. In summary: Consumers want advisors who are knowledgeable, trustworthy, and good listeners.

What makes wealth management unique? ›

While traditional financial planning primarily focuses on goal setting, budgeting, and basic investment advice, private wealth management takes a more holistic approach. It includes in-depth analysis of investments, tax optimization, estate planning, and often involves actively managing investment portfolios.

What is the most important component of wealth management? ›

Investment advice and planning are a major part of wealth management. Investments are a necessary tool to grow wealth. A wealth manager can help you develop a personalised investment strategy taking into account your needs, goals, and appetite for risk.

What are the disadvantages of wealth management? ›

Disadvantages Of Wealth Management
  • Non-Fiduciary Service. ...
  • Commission-Based Fees. ...
  • Registered Complaints. ...
  • Lack Of Experience Or Big Picture Thinking.

How does wealth management make money? ›

Wealth management firms make money by charging fees for the various services they provide. In the area of investments, clients are often sold managed account services, discretionary investment accounts that are traded on behalf of the client by one of the investment professionals at the firm.

Why do you want to work for IG wealth management? ›

Come work with one of Canada's Top 100 Employers

We were named one of Canada's top employers, thanks to our training and development, benefits packages, physical, mental and financial health support, community involvement and healthy work-life balance.

Why do I want to be a wealth advisor? ›

Mention your passion for helping people

The passion for interacting with people and helping them with their financial goals is an ideal attribute that many employers seek. Express your desire to meet people and help them with their questions and objectives to show you're eager to assist others.

Why do you want to work in financial management? ›

I'm drawn to finance because it provides a comprehensive understanding of an organization's financial health, risk management, and investment decisions. By pursuing a career in finance, I can strengthen my ability to analyze financial data, provide strategic insights, and guide organizations towards sustainable growth.

Why are you interested in a career in investment management? ›

With investment management jobs, you don't have to leave your own interests behind. Another reason why investment management could be the right fit for you is that you can use your hobbies when it comes to deciding where to invest your customer's money.


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