Wealth management services combine investment, tax, and estate planning and comprehensively manage and grow substantial financial assets.
FREMONT, CA: It is a comprehensive service that manages and grows financial assets for people, families, and businesses. Unlike the traditional financial plan, with all-rounded ways of managing wealth, it provides services that include investment advice, tax planning, and estate planning, among others. This specialized area caters to the most critical assets of the people; thus, it has to take a close look at associated costs and minimum investment thresholds.
Wealth management represents the development of an integrated financial plan whereby the client's long-term goals and risk tolerance form the basis of any client's strategy. Generally, a critical examination of the client's financial conditions regarding investment, income, expenses, and future financial needs is conducted. Based on such information, an individualized investment portfolio would be created by a wealth manager—who, more often than not, is a high-end financial adviser—to undertake asset allocation and advise on many finance-related issues.
A very critical feature of wealth management is that it is done holistically. In most cases, a wealth manager's duties would encompass coordinating with other professionals, such as tax advisors, estate planners, and attorneys, so that a comprehensive strategy is formulated touching every financial aspect of the client's life. This approach will enhance tax strategies, retirement planning, and the transfer of wealth to the next generation with client goals and objectives in mind.
Fees for wealth management vary to an extensive extent depending on the services rendered and the firm that renders them. Wealth management services are fee-based, though they might be structured in many ways. Some common structures are fees in terms of a percentage of AUM, flat fees, or by hour. The most commonly used is the AUM model, where costs are calculated as a proportion of the total amount the firm manages for a client. For example, a typical AUM charge will be somewhere in the range of 0.5 percent to 2 percent per year. Flat fees will likely apply to specified services or defined periods, but less likely will be charged for some consultation or service by the hour.
Before engaging in any wealth management service, clients must know additional charges such as fund management fees, trading commissions, and performance-based fees. Another key aspect of wealth management services is the minimum investment requirements. The firm will inform clients that it will customize the service to meet their needs and that it can effectively handle large amounts of wealth. Clients need to clearly understand all costs involved before entering into a relationship with a wealth management service to establish trust.
