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DEFINITION

Wealth Management

Wealth management is a service aimed at high-net worth individuals and affluent clients that provides them with tailored advice and strategies to manage, preserve, and grow their wealth. It encompasses areas such as investment management, financial planning, tax strategies and regulations, estate planning and so on. The client typically works either with a financial advisor or even an entire division of a bank or other financial institution.

Synonyms

Private banking, wealth advisory

Acronyms

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Synonyms

Private banking, wealth advisory, investment management

Acronyms

Examples

A high-net worth individual (someone who has over $1 million in assets) wants to create a customized financial plan. Their wealth manager analyzes their financial status, investment portfolio, and retirement plans to determine the best course of action. They then recommend a diversified investment strategy and start working on supporting processes such as cost-efficient tax vehicles, setting up a trust, and reviewing their insurance coverage. During their business relationship, the wealth manager will keep tabs on all of these as well as other important processes and offer ongoing advice, making adjustments as needed.

FAQ

A wealth manager provides a wide array of financial services, depending on the client’s specific needs. This can include investment planning, financial planning, tax optimisation, retirement planning, risk management, and so on.

Wealth management is typically utilized by upper-middle class and high-net worth individuals. This is because they require more complex financial planning and investment strategies to maintain and grow their wealth over time.

While similar, wealth management and financial planning differ in scope. This is because wealth management is a holistic approach. Namely, financial planning is only one part of wealth management, which can also encompass investment management, tax strategies, estate planning, and risk management.

Related Terms

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