Wealth management – what does it consist in?

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In the time of crisis, the issue of rational management of possessions becomes crucial in order to maintain one’s wealth status. We may be supported in carrying out such activities by a wealth management advisor. What is this relatively new service?

Wealth management – what is it?

Wealth management is a comprehensive asset management service designed for both individuals and institutional investors. It is addressed – for obvious reasons – to very wealthy clients. This type of offer is currently offered mostly by banks, but also by other institutions, such as insurance companies, brokerage houses, law firms and other independent companies. Wealth management is a response to the individual needs of clients who have at their disposal large resources, not only savings, but also fixed assets, such as real estate. They need a much wider range of advice and more advanced services than those offered as standard by banks or other financial institutions. It is with them in mind that individual offers are created comprehensively realizing banking and financial services.

What does a wealth management advisor do?

Wealth management advisors and specialists focus on providing holistic service to clients, covering various aspects. Following the Encyclopaedia of Management, they are able to assist clients in:

  • private banking,
  • fee-only portfolio management,
  • investment advisory,
  • private equity investing, through so-called alternative funds, including hedge funds,
  • non-financial advisory (real estate, investments in works of art, etc.).

Specialists in this area can also provide support with various types of insurance planning and with wealth planning in the broadest sense, with particular emphasis on tax and inheritance.

Financial institutions offering wealth management to their clients employ a diverse staff of specialists in various fields: finance, economics, law, etc. Their goal is to meet the exorbitant expectations of their clients. Therefore, departments dealing with this kind of services are supposed to surprise their future recipients with an innovative and flexible approach to their needs

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What assets do I need to have in order to use wealth management services?

Wealth management is addressed to individuals (and not only) who want to entrust their assets with management of a minimum value of 1 million USD. However, it is pointed out that in most cases this amount is very conventional. Depending on the country in which the service is offered and the industry in which the person operates, the amounts entrusted to the management of specialists in this field are usually much higher and reach from several to several million dollars. In Polish conditions the amounts of assets which allow for the use of wealth management services are usually much lower. However, it is not a rule. The minimum limit in some institutions is only (!) PLN 100 thousand and in others it is as much as PLN 5 million. This is the result of the fact that the Polish freelancers still differ from their foreign counterparts as far as the accumulated funds are concerned. It is worth noticing, however, that in the recent years the situation has been changing and in our country there is a growing number of people with assets qualifying them to make use of professional and comprehensive wealth management.

What is the essence of wealth management?

Wealth management is a service for the most affluent people. They are usually interested not only in multiplying their capital, but also in securing it and often also in donating part of it to noble charities. Therefore, advisors dealing with this type of clients are supposed to play the role of investment consultants, who will suggest how to safely invest and multiply the capital held. In moments of crisis, the task of the wealth management specialist is to secure the assets as much as possible. The manager also often acts as an intermediary and advisor in the matter of charitable donations

Photo: Andrea Piacquadio/Pexels

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