Wealth management can be termed as a discipline or principle of investment advisory. This includes both planning for finance and portfolio of investment. Lots of other financial services also come under the single term wealth management. Financial planning can be defined as a budget which is called as a plan for earning and spending money.
There are various parts of expenses involved with our day to day activities like rent, money spent on utilities, travel expenses, etc. Similar to financial planning is the portfolio investing and wealth management. It deals with a variety of collections of business institutions or individuals.
Individuals who have high net income, owners of small business and families who seeks financial advisers would consult financial or wealth managers in their investment planning. They coordinate with government bankers, real estate planners, government resources, professional tax managers and with investment management.
For managing wealth, one should have brought proper license. They can be MBA graduates, CFA char holders or they may work for certified financial agencies. People should get advices from these professionals only. Taking advice from untrusted bodies can have adverse effects. For an effective wealth management the person or the firm which seeks wealth management should have sufficient wealth accumulated already. Based on the amount the firms have accumulated, the professional advisers can deliver long term wealth grow strategies.
There are also other wealth managers prevailing in the market. Many large corporations, independent sources and well established portfolio managers also get involved in this service. But these big service providers look only for big customers.
Segmentation strategy marketing is now advised by many large corporations and large brokerage agencies. The concept of segmentation strategy is to use both the products which are proprietary and non-proprietary and sell them in the market.
This is mostly advised for large companies because this can help them expanding the product lines and people always prefer buying brand names. Individual wealth managers usually have lots of years of experience is any one of the financial firms like banking, real estate planning, stock and share trading, legal regulatory products and risk management firms. Both brokerage firms and banks would prefer these kinds of experienced people to hire and attract their clients for better advisory.
The events which took place in the year 2008 have brought lots of changes in the wealth management industry. Many concerns got raised to address portfolios. Traditional thinking about investing, asset allocation, correlation and diversification has changed completely. Risk tolerance of individual investors was tested in this year to high extend. Many assumptions made on investment got changes. This poised a major challenge to the wealth managers.
Wealth managers should also be capable of handling situation smoothly to some extent. They prepared themselves for providing satisfactory to their clients and to gain long term relationship with the customers. Most of them advised the policy of ‘buy and hold’. The income of every individual is getting on increasing. It is advisable for every individual and corporations to consider wealth management as a key factor for their wealth building.