What is wealth management?

Wealth management encompasses all parts of an individual’s financial life, and is not just about providing advisory services. Investment advisory comes as part of wealth management when high net worth individuals prefer to adopt an integrated approach, instead of engaging multiple professionals and piecing various advice and products together on their own. This method allows the wealth manager to coordinate the services needed to manage their client’s assets, while formulating a strategic plan for the near and long term. This normally includes the likes of wills, trust services or business succession plans.

Private wealth management combines various financial services to address the needs of affluent clients, particularly those with diversified interests. Wealth managers adopt a consultative process based on the client’s specific wants and needs. This is where the advisors will tailor personalised strategies using a range of financial products and services. 

Strategies of a Wealth Manager

The flow of wealth management begins with a plan formulated by the wealth manager to assist in maintaining and growing a client’s wealth. This plan is set based upon the financial situation, risk tolerance and the goals of the client. In order to achieve the ultimate aim to protect the wealth and interests of the client, managers would also have to consider the tax planning, wills, financial projections and retirement planning.

Once a plan is in motion, there would still be a need for frequent reviews and updates on the client’s goals. This would mean that regular adjustments and rebalancing of the client’s portfolio would be necessary, including the consideration for the need of additional services. This is done in the hopes of securing a life-long client.

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There are 2 main approaches to wealth management: 

Collaborative approach

This approach would involve wealth management firms who act as the hub of a team of advisors. The process usually includes a Certified Financial Planning professional (CFP), who provides financial planning and investment management in alignment with the client’s other advisors (for tax, legal, insurance, etc.). Therefore, this ensures an integrated approach to growing, protecting, utilizing and disseminating the clients’ wealth.

Single office approach

This approach is commonly offered by big banks, brokerage firms or what are known as family offices. Some commonly found wealth management banks include UOB Wealth Management, Goldman Sachs Singapore, citigold and the Bank of Singapore. These firms have a ‘one-stop solution’,  having professionals under their employment dealing specifically in areas such as investments, risk mitigation, estate planning and tax planning, and others. Broker-dealers often provide additional support and services to the affluent. 

What are the advantages of Wealth Management?

Wealth management is considered to be a more well- rounded and holistic approach compared to financial advice. With client-specific tailored solutions incorporated into wealth management plans, a single manager coordinates a bundle of services and financial products necessary to manage a client’s money and needs, including the current and future financial goals.

The integrated, multi-faceted services provided minimises inconvenience for clients by reducing the need for the client to manage such services separately. Having a central hub for the management of wealth also reduces exposure of the client’s sensitive information and maintains the confidentiality of information obtained during the course of financial planning and advisory services.

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