Wealth Management – Managing Your Investment Portfolio

Wealth management is a highly specialized discipline that is particularly useful for high net-worth individuals and organizations. This includes planning for aspects like investment, insurance, retirement, asset protection, tax planning, business planning, etc.

A good financial adviser or management company would begin by understanding the client's lifestyle, earnings, and financial goals. Thereafter, they would plan how to deal with taxes, inflation, lawsuits, creditors, etc. so that the preferred lifestyle could be maintained and the financial profit could be maximized.

One of the most popular aspects of wealth management is tax planning. This might include setting up trusts, charity and donation planning, or taking steps to maximize tax benefits. This also requires critical estate planning. This is to ensure that the estate is saved from creditors, taxes, and lawsuits. Also, estate planning would help the estate go to the rightful heirs or the people that the owner intends in case of death. Wealth managers should provide help with handling mortgages, college funding, etc. These managers should also be adept at advising about expenses that an individual might like to make.

Do you require expert help?

The definition of high net worth individuals is different in each country. However, according to a common definition, individuals with assets worth more than US $1 million, without including their residential premises, are seen as high net worth individuals. Several high net worth individuals manage their own assets and portfolios. But some people might not have the time to do so. Others might feel that they do not have the necessary expertise to maintain their high net worth in the dynamic market situation. The managers step in to help such people with proper planning.

Investment options are varied for the degree of the wealth that is to be managed. 'Private' and ‘Corporate' wealth management are different according to two main aspects.

The timeline are different for these two options. Naturally, financial strategies for the lifetime of an individual would be very different from those required for a corporate entity. Tax management for individuals is also more complex than that for corporate entities. Also, individuals have to keep in mind their earning potential and have their portfolios managed in a way to maximize this potential. Individuals of high net worth would also require tax planning very specific to their individual lifestyle and requirement.

Several big banking and investment firms have particularly created divisions to cater to affluent clients for private wealth management. Some firms have retail divisions tiered according to clients divided in groups depending upon assets worth below $10 million, and more than $20 million.

Several universities in the USA, UK, and Australia started offering programs on wealth management to private investors back in the 1990s. Thousands from around the world have attended these programs. The students have included both those who wanted to excel as wealth managers themselves and those who wanted to manage their wealth themselves.

Wealth management has become even more vital in the modern economic scenario with the risk of recession and downturn afflicting all the economies of the world.