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Providing insight from more than 32 years of financial industry experience helping you to make better financial planning and family planning decisions.


What Exactly Is Wealth Management?

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We should begin by defining the mostly misused term of wealth management.  Most people assume that wealth management automatically means it must have something to do with the well off and the rich.  The word "wealth" seems to have that effect on people.  Wealth management is the comprehensive oversight of the entire assets of a person and/or a family.  The assets could consist of cash, stocks, bonds, real estate, businesses, royalties, inheritance, collections, art, automobiles, aircraft, boats/yachts and so much more.


Most people normally equate wealth management with the asset management (portfolio management) of more than $1,000,000 in bonds and equities.  Would it make sense to hire a wealth manager to oversee the investment of several million dollars when you might own your own company worth $25 or $50 million?  An Investment Advisor can manage investments for a client without managing the client's other interests.  This would be a dedicated investment based on a certain risk tolerance and style of management.  Comprehensive wealth management would incorporate the several million dollars as well the privately held company worth $25 or $50 million because they are both part of one person's total wealth.  The taxes that this entrepreneur would pay would be based on his investment income and business income.  Tax issues should be considered when making certain investment decisions.


I'm not suggesting that the Wealth Manager is going to run his client's company just because he was hired to provide comprehensive wealth management services.  The Wealth Management Advisor will review the client's entire holdings and formulate a plan to proceed with the client's goals in mind.  Whether or not a Wealth Manager has direct oversight of certain assets shouldn't prevent those assets from being part of the client's overall total picture.  A true Wealth Management Advisor will focus on bottom line of the entire client picture and not just focus on the portfolio of stocks and bonds he/she may personally manage.


True wealth should be defined by each person or family based on their goals and aspirations.  One family might consider their wealth of $500,000 to be all the wealth they need besides their health.  Another family might consider true wealth to be holdings of $10 million while still yet another family would set the bar at $100 million.  We all know that are more billionaires out there today than ever before.  Everyone should decide what true wealth means to them and make sure they include everything they consider valuable in their personal comprehensive wealth management strategies.

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