When asking the question “What is Private Wealth Management?”, the first thing to determine is who is asking the question. The short answer is that private wealth management is the practice of monitoring and managing funds to meet short and long term goals. The issue can be explored more fully by determining if it is the high net worth individual who is asking the question, or if the question is being explored by a financial advisor.
In the case of the financial advisor, it’s important to realize that private wealth management is always for an individual, and not for a corporation, company, or another group that has significant funds to be managed. While some of the aspects of managing these funds will be similar to managing the funds of a group, the individual will tend to have somewhat different goals and timelines for reaching those goals.
From the individual client’s perspective, the question of “What is private wealth management” requires a bit more in depth answer, and perhaps a few more questions to be answered. The individual not only wants to know the definition of private wealth management but also needs to understand what it can do for them.
A financial advisor that specializes in private wealth management is there to help you define, measure and reach your goals for your personal finances. This may well include things like planning for retirement, planning for ongoing management of an estate, and long- term financial planning for your family and heirs. A competent financial advisor treats your goals as their goals and ensures that the plan you’ve made together is being executed and carried out as it should.
Once you and your advisor have specified your goals, the advisor’s role is to guide you toward the right financial products. It is their job to understand what investments will be best for you, how to help minimize your taxes, and how to diversify for risk management. Their job does not stop there, however. As you live your day to day life, the advisor is monitoring the performance of the products and investments that you have selected, to ensure that they are performing as expected and that you are on track to reach your goals.
Managing the finances of a high net worth individual is complex. It’s not enough to grow the wealth. Wealth needs to be protected so that it isn’t lost to taxes or to poorly calculated risk. Ongoing needs have to be prepared for. This may include long- term care planning, Medicare supplemental insurance, or it may mean an umbrella liability policy . In addition, your wealth needs to be protected for transfer, so that unexpected estate legalities don’t impede the transfer of your life’s work to your heirs. Private wealth management addresses all of these issues, enabling you to live your day to day life without worry.