I’m a college student studying finance and numerous professors and peers that I would be “really good at wealth management.” Only problem(s): I don’t know what I did to give them that idea, and every time I google what wealth managers do, it goes over my head as I’m only a sophomore and only have studied introductory business topics thus far. TIA!
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Wealth management is providing financial services for wealthy people. It goes beyond basic accounting and usually involves investment strategy, estate planning, tax services, setting up trusts, etc. Basically all-in-one services for people with a lot of money.
There’s a few different things,
Most of it is investment management, so helping people decide what to invest in, how to plan for retirement, how to allocate funds, diversify properly etc…
Other parts of it just include like balancing income and expenses, helping people know like your kid goes to college in 6 years, or you want to get 3 rental properties so you can do this, plan for taxes, estate planning etc…
I also don’t know what someone would do to indicate they’d be good at wealth management… usually it’s unfortunately little to do with how good you are at managing anything, and more if you can get clients. It’s more of a sales and relationship building thing. Just convince rich people to let you manage their money, then they put it in mutual funds and shit which require no real knowledge.
Helping people decide on the best allocation of investments — stocks, bonds, what stocks and/or mutual funds. May also tie into other related areas of wealth management like setting up trusts, how to structure charitable donations.
Ok well this is what I do for a living..
**Short version**: I help people convert their goals into measurable objectives, and then help people reach those objectives
**Medium version**: I focus mainly on cash flow management, investment management, risk/insurance management, tax planning, retirement planning, estate planning, and behavioural management. These are the areas that I focus on. I start by taking inventory of where people are today, then figure out precisely where they want to be (and when), and I build a plan (focusing on those areas) to get them there.. then I help them implement the plan, and follow through with it.
**Long version** : gone are the days where you send your “money guy” your investment funds, and he chases after the biggest returns possible. It didn’t work for a few reasons: first off, the chosen portfolios usually didn’t match clients’ risk tolerance or risk capacity. Secondly, that’s not a holistic approach. Not only does it not work towards anything; it doesn’t cover your client’s ass.. all offense, no defense.. thirdly, it doesn’t provide the satisfaction that the holistic approach provides.. clients stay in an accumulation mindset, and have trouble enjoying retirement.. when a client sets a goal, accepts the plan, implements it, follows through with it, and finally gets there, there’s a feeling of satisfaction and safety.. want to buy that Porsche to celebrate retirement? You can, and you can feel good about it, because you know that everything else is taken care of, and this little pot of money is set aside for you to celebrate with – that was always the plan for it. It’s not a “holy fuck, my $4mill is now $3.8mill, wtf wtf wtf that’s 5% of my account” reaction, which you get if you have no plan, and you’re stuck in an accumulation mindset..
The new method acknowledges that money is not the end goal. Money is just an enabler. So we focus more on what people actually *want* from their life, and then we figure out how the money side of things needs to work.. instead of chasing returns, we figure out exactly what the client needs in order to reach their goals, and then we take on the least amount of risk possible to get that amount (in other words, we look to get the needed return, and nothing more, because more return generally means more risk)..
**An example**: say Joe blow is referred to you. He is an executive at a manufacturing company in the area. He is worried about what would happen to his stay at home wife and two young children if he were to become ill, or pass away. Recently, a friend of his died, and his wife and kids really struggled financially. He is also concerned about what retirement will look like – he has a fantastic defined benefit plan through work, but his wife has nothing in place, and he wonders if he should start saving in addition to his plan. He owns a cottage, in addition to the family home, and he wants his children to inherit the property eventually, but he isn’t sure about how that should be structured. One of his children has a disability, and might never become fully independent. Joe is not sure of the options available, but wants to make sure that this child is looked after, without burdening his other children in their adult years. Etc. Etc. Etc.
So you would take full inventory of his current situation, where he wants to be, and would build a plan to get him there..
In addition to the other answers, are you somewhat sneaky or conniving in some way? Obviously not all wealth managers will do this, but there are a lot of rich people who don’t want to pay the taxes they’re supposed to, so finding ways to hide the money, either in shell corporations or certain countries’ banks. Think of things like the Panama papers.
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