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Wealth management may seem like it’s pretty self-explanatory, but many professionals are still not able to precisely define its meaning despite the common use of the phrase. Wealth management at its core is addressed from two perspectives: the affluent individual and the financial advisor. From the individual’s perspective, wealth management is the science of solving or enhancing their financial situation. From the financial advisor’s perspective, it is the ability to consult and provide a full range of financial products and services to the individual.

Wealth management combines financial and investment advice, accounting and tax services, retirement planning, legal planning, and estate planning by a wealth manager. An individual would work with their wealth manager, who would coordinate advice from financial experts and potentially the client’s attorney, accountants, and insurance agent. Some wealth managers may also provide other services, such as banking services or advice on philanthropic endeavors.

Since wealth management encompasses all aspects of a person’s financial life, wealth managers are consultative, allowing them to be fully client-centered. One of the goals a wealth manager has is to take a holistic approach to their client’s finances. That being said, while it is entirely possible for wealth managers to provide the full scope of wealth management services, they typically only specialize in products and services they are most comfortable with.  

The main objective of a wealth manager is to understand the individual they are consulting and find out what’s important to them and why. Wealth managers develop a plan that will maintain and increase their client’s wealth based on the individual’s financial situation, their goals, and their overall comfort level with risk. The wealth manager is then able to provide the appropriate financial products and coordinate a team of experts to effectively address the needs and wants of their client. Once the initial plan is established, the wealth manager and client will regularly meet regularly to update the client’s goals, review their financial portfolio and rebalance the assets if need be, and examine if any additional services or products are needed to meet the client’s financial goals over their lifetime.

In sum, wealth management is the consultative process of addressing and meeting the needs of an individual’s financial goals by providing them with the financial products and services that will best complete those goals. This is completed by a wealth manager and a coordinated team of experts to address that individual’s specific needs and wants.