These days, there are so many terms used to describe what financial professionals do – advising, coaching, consulting, planning, guiding, managing, etc. – none of them seems to hold much meaning, for investors or those in the industry.
And that’s a shame. Because there is a difference.
Wealth management is one of the terms that is most overused, and it’s often misunderstood. But it’s actually pretty straightforward. Wealth management takes things up a notch, with an adviser or advisory team providing a full range of services for the client in three distinct ways.
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
1. Investment consulting
You probably see ads and hear pitches every day from individuals and companies who want to sell you investment products. Some do it better than others. Although any licensed adviser can help you on this platform, a good wealth management team can provide a wide variety of options to choose from.
2. Advanced planning
This is where a wealth manager really differentiates himself. Few advisers do this type of planning, which includes:
- Wealth enhancement: This is the use of strategies to deal with cash-flow issues and liquidity concerns, mitigate taxes and maximize growth.
- Wealth transfer: Advisers look for the most efficient ways to pass your wealth on to your heirs in a way that lets your beneficiaries keep most or all of the money.
- Wealth protection: For those who are subject to a lot of liabilities, there are strategies that can help protect hard-earned savings and avoid any blind spots.
- Charitable giving: With proper planning, donating to a charity or charities can be a win-win, maximizing support for a favorite cause while making the most of certain tax advantages.
3. Relationship management
This is about building a trusting partnership that goes beyond the basics, thoughtfully connecting with clients and their needs in two ways:
- The client relationship: Through a careful discovery and review process, the adviser can see where clients are now and where they want to go, and look for any gaps that might exist.
- A professional network relationship: A top-notch advisory firm will build a team around each client to help with all kinds of issues. It could include a CPA, an estate-planning attorney, a property and casualty expert, a long-term care consultant or some other professional. And, if the client already has some of these experts in place, the team will communicate and work with them to further enhance their efforts.
A wealth manager’s No. 1 aim is to find out what’s important to you and provide financial solutions. If you’re looking for a full-service, collaborative approach to reaching your financial goals – now and in retirement – an adviser who practices true wealth management could be just the right fit for you. I typically suggest talking with your friends and family and get a referral that way. When you sit down at your first meeting, ask questions.
- What does their typical client look like?
- What net worth are they used to working with?
Wealth managers should be able to help with tax-reducing strategies, preparing an income plan, maximizing Social Security and making sure estate-planning documents are in order.
Securities offered through GF Investment Services, LLC. Member FINRA/SIPC. Investment Advisory Services offered through Global Financial Private Capital, LLC. California Insurance License #s 0B34918
Kim Franke-Folstad contributed to this article.
-
Stock Market Today: President Trump Reboots the Tariff TradeA broad consensus that markets hate uncertainty more than anything else is being tested on an almost daily basis in 2025.
-
Electric Car Owners Can’t Avoid Road Taxes in 2025New Taxes Hawaii launched its new EV road usage fee in July. Here’s why some states are implementing similar new electric vehicle taxes across the nation.
-
The Hidden Costs of Caregiving: Crisis Goes Well Beyond Financial IssuesMany caregivers are drained emotionally as well as financially, leading to depression, burnout and depleted retirement prospects. What's to be done?
-
Cash Balance Plans: An Expert Guide to the High Earner's Secret Weapon for RetirementCash balance plans offer business owners and high-income professionals a powerful way to significantly boost retirement savings and reduce taxes.
-
Five Things You Can Learn From Jimmy Buffett's Estate DisputeThe dispute over Jimmy Buffett's estate highlights crucial lessons for the rest of us on trust creation, including the importance of co-trustee selection, proactive communication and options for conflict resolution.
-
I'm a Financial Adviser: For True Diversification, Think Beyond the Basic Stock-Bond PortfolioAmid rising uncertainty and inflation, effective portfolio diversification needs to extend beyond just stocks and bonds to truly manage risk.
-
I'm a Retirement Psychologist: Money Won't Buy You Happiness in Your Life After WorkWhile financial security is crucial for retirement, the true 'retirement crisis' is often an emotional, psychological and social one. You need a plan beyond just money that includes purpose, structure and social connection.
-
Retiring Early? This Strategy Cuts Your Income Tax to ZeroWhen retiring early, married couples can use this little-known (and legitimate) strategy to take a six-figure income every year — tax-free.
-
Ditch the Golf Shoes: Your Retirement Needs a Side GigA side gig in retirement can help combat boredom, loneliness and the threat of inflation eroding your savings. And the earlier you start planning, the better.
-
Roth IRA Conversions in the Summer? Why Now May Be the Sweet SpotConverting now would enable you to spread a possible tax hit over more than one payment while reducing future taxes.
