There are two aspects to the wealth management process; protecting assets from creditors, market crashes or slowdowns, taxes, lawsuits and other unexpected events, and growing asset values through methods that actively manage risk and reward profiles to clients needs.
Wealth management helps people determine their monetary goals and develop actionable strategies that could help them realize their goals. It also defends their finances against risks. Wealth management is a service designed specifically forhigh net worth individuals. The threshold for high net worth varies by country and institution, but the most common definition is individuals who have more than US$1 million in assets, not including their home. Some high net worth individuals have done well ingrowing their assets from a low base to their current levels, and may feel that they can continue to manage their own portfolios. However, as a person’s wealth grows and/or the markets get more challenging, it becomes increasingly difficult to realize theexpected returns.
With greater wealth comes greater investment options as well as more complex risks and threats in terms of legal regulations, taxation issues and opportunities for loss. The level of fear or even outright panic that can be experienced grows with the sizeof the investment involves. Greater diversification is needed than in earlier stages of investing. This is where independent financial advisers or large corporate entities help their clients through professional wealth management.
Wealth management offers the following services: