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What is wealth management?

By:  George Sweeney (DipFA) | 20th September 2021

Wealth management means efficiently organising your finances in order to best look after your money and assets. This often includes using an adviser to combine different financial services with the goal of preserving or growing your wealth.

You may think the idea of managing your wealth doesn’t apply to you. But learning to manage money properly isn’t just for the rich elite. It’s something that everyone could, and probably should be doing.

Let’s take a look at what wealth management means and how it can change the way you look after your money as you move through life.

What is wealth management in simple terms?

Wealth management is quite a diverse subject and usually involves using an adviser to help manage large amounts of money and assets.

Depending on your situation, this could be relatively straightforward or quite complicated. Proper and efficient management of your money might seem like a lot of effort, but it’s something well worth doing.

Whether you arrange things yourself or get professional help, having a structure to work with will save you time and allow you to create multi-generational wealth.

What’s the difference between a wealth manager and a financial adviser?

Often, a financial adviser will help with full planning, taking into account the many moving parts of your life. Financial planning can be extremely helpful, even if you don’t have a lot of wealth.

A wealth manager, on the other hand, usually focuses more on investments and assets. So they tend to work mostly with high-net-worth individuals. Wealth managers do sometimes interact with other professionals like solicitors or accountants to help provide a client with complete and diverse financial support.

There are, of course, many overlaps, and most financial advisers will be trained in wealth management to some degree. But when there are big sums of money on the line, most choose to have specialist support.

Do I need to pay someone to manage my wealth?

Although controlling everything yourself can be cheaper, it could end up becoming time-consuming.

If your financial situation is quite complex or your investments are worth a significant amount, then it can be useful to seek guidance from a wealth manager or financial adviser.

It could also be the case that spending time streamlining your finances isn’t something that excites or interests you. If that’s the case, it may be worth seeking assistance or making use of something like an investing solutions provider.

These services can be a good way to get your portfolio tailored and managed at a low cost. However, the service won’t be completely bespoke and you may be limited with your options.

How much money do I need for wealth management?

Some wealth managers will only work with clients who have a certain net worth. But don’t worry, you can do some of your own wealth management. It will help you on your way to becoming one of those high rollers!

Even if you only have a relatively small amount of wealth, learning to manage it properly sets some good habits. This way, as your wealth grows, you already know how to best make your money work in the most efficient ways.

Wealth management on a smaller scale is good practice. Also, it can set a good tone for the rest of your finances. This way it won’t feel overwhelming or like it’s too much work once your wealth starts growing.

Should I be my own wealth manager?

It can be good practice to manage your own finances for a while. You will learn a lot and the knowledge you gain will help you choose the best professional advice in future.

Once your wealth grows or feels like too much work to keep on top of, seeking out a trustworthy financial adviser can be a great way to help you plan ahead and keep on top of things.

Then, if you’re ever in the lucky position to see your net worth skyrocket, you could benefit from more specific support with a specialist wealth manager.

So you can think of these like three separate steps as you progress. Of course, getting professional advice from the start is an option. But having at least some personal understanding of wealth management will only help you on your financial journey.

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