At What Net Worth Should I Hire a Wealth Manager?
Choosing the appropriate financial help can be crucial to managing your finances effectively. In the UK, financial advice professionals have three main titles: financial advisers, financial planners, and wealth managers. While the terms may sound similar, some distinctions exist, particularly between financial planners and wealth managers.
Financial planner vs wealth manager?
Financial planners and wealth managers often perform overlapping roles, but wealth managers typically offer a more holistic approach. Wealth management involves more complex planning, especially regarding taxation, estate planning, and investment strategies. Wealth managers usually work with clients with more substantial assets and diverse financial needs, such as business owners, barristers, or individuals in high-net-worth occupations.
How Much Money Do I Need to Work With a Wealth Manager?
According to the Financial Times in August 2023, the typical range for individuals seeking wealth management services is between £250,000 and £5 million in investable assets.
Beyond this range, private banks often take over. This threshold seems consistent over time and across regions, with similar figures noted in studies, though some data, like CEG’s chart from 2005, are based on the US market.
Signs You May Need a Wealth Manager
The profile of a typical wealth management client includes successful individuals such as business owners, barristers, professionals in the entertainment industry, and partners in firms.
However, wealth isn't limited to those who have built their fortunes through income or business. Inherited wealth is becoming increasingly significant, leading to more individuals with complex financial needs as they come into money from family members.
While the primary source of wealth can vary, one consistent trend is that real wealth often accumulates with age. Those over 55 typically have more substantial assets, partly because of life stages, accumulated investments, and inheritance.
What are the Advantages of Using a Wealth Manager?
The advantages of a wealth manager include:
Holistic Approach: Wealth managers offer comprehensive financial planning that covers a wide range of services, including investment management, tax planning, and estate planning.
Expertise in Complex Needs: They specialise in dealing with more complicated financial situations, particularly for clients with substantial assets, business interests, or intricate taxation matters.
Tailored Advice: Wealth managers provide personalised strategies for high-net-worth individuals and specific client profiles, such as business owners and barristers.
Long-Term Planning: They focus on long-term financial health, helping clients navigate various life stages and ensuring continuity through different generations.
Navigating Inherited Wealth: Wealth managers assist individuals who inherit wealth, offering guidance on effectively managing and growing these assets.
Wealth Management is a Changing Industry
The wealth management industry is facing a shift. Wealth is becoming more concentrated among the older generation, and advisers are also ageing. This creates a unique challenge for younger clients seeking long-term financial relationships. Finding a firm with a multi-generational team could be a strategic consideration for those looking for a financial partner to see them through different life stages.
Is Wealth Management For You?
Wealth Management offers a comprehensive approach to financial planning, addressing more complicated financial needs like taxation and estate planning. Generally, this service is most suitable for those with investable assets exceeding £250,000 and who fit specific profiles, including business owners, barristers, and high-net-worth occupations. However, with an increase in inherited wealth, a new generation is also seeking the expertise of wealth managers to navigate their financial futures. Ifamax are wealth managers in Bristol, if you would like to find out more about or services, please contact us.
