What Is Wealth Management?


Wealth management is a type of financial advisory service that is available to individuals who are accredited investors as well as those with a large net worth.

Key Takeaways

  • The practice of wealth management can be described as a type of financial advisory service typically only available to people who have high net worth.
  • Billionaires as well as millionaires will be most likely to require the assistance of a wealth management professional.
  • Wealth management will help you make decisions regarding investment as well as estate planning and retirement taxation, accounting and much more.
  • Wealth managers typically make money through a commission that is that is based on a percentage from the portfolios they oversee.


Definition and Example of Wealth Management

The people with a large net worth might require more services than the ones offered from traditional advisors to finance. People with billions or millions of dollars could have complex portfolios, tax-related issues and other requirements that may not be applicable to the average investor.

Wealth managers usually have access to a larger selection of financial services and products. Clients pay a cost, however, they get strategies that are designed using their financial needs in mind. The services offered by wealth management firms could include:

  • Investment management and advice including retirement planning
  • Tax and accounting services
  • Review of health care coverage and Social Security benefits
  • Charitable plans for giving
  • Assistance in starting or selling an existing business

There is no need for an investment advisor in the event that you don’t have significant net worth. You could instead invest in an advisor for your financial and investment adviser who will help you increase your wealth over time.


A financial advisor might be able to assist you accumulate wealth. However, a wealth manager will assist you with managing your money once you’ve had a substantial net worth.


How Does Wealth Management Work?

Similar to most financial advisors, Wealth managers make their earnings through a share from the portfolios they control. The charges differ between firms, and can even vary across different kinds of accounts within a company. It is possible to expect fees that start at 1% of the assets under management.

The transition into wealth management is the ideal career option to financial advisers. Wealth managers make $50,000 in commissions the course of a year for one client if they could charge only 0.50 percent for the client who has $10,000 of assets. The more clients a wealth manager has, the higher those fees are added to.


Wealth managers often compete with each other to “whale” clients who have the most wealth. They might charge a lower percentage fee in the event that you have more net worth. The greater the number of assets they manage are under management, the more fees they collect even though they’re charging a lower rate per percentage.

Wealth Manager Qualifications

There aren’t any set standards for becoming an asset manager, but there are certain qualifications in the experts.

The majority of wealth managers have university degrees, typically in fields such as accounting or finance. Many have Master’s or law degree or other certificates. It is also possible to make them certified Financial Planners (CFP) and Certified Private Wealth Advisors (CPWA).

Wealth managers are usually expected to handle the purchase and sale of bonds, stocks as well as other investment options. They’re generally required to be able to pass the Series 7 exam administered by the Financial Industry Regulatory Authority (FINRA). 1

How to Find Wealth Managers

There are a variety of options available when you require an investment manager. Look around and choose one that is best suited to your requirements. Many prefer to work in conjunction with an individual wealth advisor who will provide highly customized services.

Other people may decide to partner with the divisions for wealth management of the largest financial institutions. They are not as personalized but they can help draw in larger amounts of capital through pooling the resources of a number of wealthy clients.

The majority of institutions have wealth management departments.


Wealth Management vs. Asset Management

Wealth Management Asset Management
More broadly oriented than asset management. A lot more specific than wealth management.
Concerning taxes, assets Trusts, assets and much more. Concerns assets like bonds, stocks as well as real estate and even cash
It is for families or individuals. It can be applied to businesses, individuals or any other type of entity
Exclusively for those with an impressive net worth There is a form for all

The practice of wealth management is similar to managing assets in a variety of ways. However, it is a much more broad practice. It is obvious when you consider these two concepts. “Asset management” involves assets such as bonds, stocks, cash as well as real estate. “Wealth management” covers every aspect of wealth, including tax-related issues as well as business ownership and issues that could impact your family over the years.

Management of assets is accessible. Wealth management is usually reserved for people with a significant net worth. Asset management however is a tool that can be utilized by anybody. Businesses too can take advantage of asset management. This ensures that the assets of the company are utilized effectively feasible.

the authorAaron Krause

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