Definition of wealth management

Wealth management is a practice that in its broadest sense describes the combining of personal investment management, financial advisory, and planning disciplines directly for the benefit of high-net-worth clients. But it also is an increasingly popular self-branding reference that advisors and financial representatives of many different stripes adopt, often to describe a wide range of possible functions and business models.

In the narrowest context, a wealth manager helps a client construct an entire investment portfolio and advises on how to prepare for present and future financial needs. The investment portion of wealth management normally entails both asset allocation of a whole portfolio as well as the selection of individual investments. The planning function of wealth management often incorporates tax planning around the investment portfolio as well as estate planning.

More expansive definitions of the term append other tasks to the wealth management relationship, such as philanthropic counselling or coordination of the governance and routine administrative matters of large families. Other wealth managers add banking and lending capabilities or legal advice to their service mix.

Various kinds of financial professionals can claim the title of wealth manager, including advisors, brokers, private bankers and family office representatives. There is no single accepted certification for a wealth manager, though common ones for such professionals include the CFP, CFA, and MBA in the United States.

In the US, a variety of firms tout themselves as wealth managers. For instance, one of the largest brokerages, Morgan Stanley Smith Barney, uses the term to describe its model. Others that freely use the term include independent financial advisors, such as Lexington Wealth Management; trust companies, such as Atlantic Trust Private Wealth Management, and private banks such as BNY Mellon Wealth Management. [1]

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