There is plenty of misunderstanding around the wealth management industry, with many people confusing the wealth manager role as a professional who merely has a knack for choosing the right stock and investments for their clients. However, that’s far from the case.
Today, wealth managers can help you plan out your entire financial and personal life in detail and, most importantly, according to the stage of life you’re currently in. Their goal is to simultaneously create assets, update strategies and protect your greatest assets through suitable investment solutions, insurance options and managing risks.
The second presumption and fallacy is that wealth managers are only for the rich. You certainly don’t need to be one of Australia’s 193,000 high-net worth individuals1 (somebody who has net assets worth at least $1 million, excluding primary residence) to reap the benefits of having an experienced set of eyes preserving and growing your wealth.
When’s the right time to seek help?
At a certain point in your life, you’ve probably accumulated enough investments to see what can go right and what can go wrong. Just like car insurance protects your car, and home and contents insurance safeguards your home, wealth management resources protect your assets. That’s why it’s wise to have an expert advisor behind you earlier, rather than later in life, to save you time, money and maximise your results by pointing out any liabilities.
A major concern for an investor who has an impressive portfolio under their belt is paying the high level of tax that comes with it. A great wealth manager can provide legal tax deduction advice so the tax man doesn’t snatch all of your profits due to poor planning.
Another invaluable resource that wealth managers offer is their network of accountants and attorneys who can help facilitate life’s unexpected surprises, such as divorce, retrenchment and even death. Figuring out who will look after the kids and ensuring your wishes will be taken care of aren’t investment issues these concerns come under the wealth management umbrella.
Wealth managers are also actively involved in retirement planning. There’s peace of mind knowing investment profiles are updated and changed regularly according to where you are in your life and your comfort zone. As you mature, risks are reduced by moving investments into more secure, conservative areas. The same can be said for updating estate plans, power of attorneys and wills, as circumstances can change in seconds.
Wealth manager checklist
- Qualified: Steer clear of salespeople trying to sell published finance books, insurance products or pyramid schemes. Select an experienced and licenced certified financial planner who is up to date with the latest laws and economy issues. Visit the Financial Planning Association of Australia to find a certified planner
- Trustworthy: Build an honest relationship with an advisor you can depend on, who knows and believes in what they’re doing and, most importantly, speaks to you in terms you understand.
- ultidisciplinary approach: Find a wealth manager who is capable of juggling and addressing all portfolio matters from retirement, insurance and investment needs to your estate, superannuation and will.
- Well-connected: It’s vital to choose a wealth manager who works closely alongside a network of legal advisors, insurance experts, real estate advisors and other industry experts.