Fee-only Investment Management

Wealth management generally revolves around investment management. This means the wealth manager is actively overseeing and managing portfolios for their clients. This may be accomplished with numerous different strategies and investment philosophies depending on a client’s age, risk tolerance and other factors. Investment management also requires a custodian to hold the assets of the client and provide a separate structure for trading, reporting and account statements. Depending on the wealth manager’s firm structure, the custodian may be the same firm that the advisor works for (in the case of large brokerage firms who have their own advisors) or a third party firm that is independent of the wealth management firm. 


Financial Goal Planning

Planning for specific goals is another major service offered by wealth managers. The planning process is often a crucial source of guidelines for the investment program. For instance, if a client is planning to spend a certain amount of money each month in retirement, that is a necessary point to include in the investment program. If a client expects an inheritance that will also affect the investment style. There are countless scenarios that can be projected and planned for that and that offering is a big advantage of having a comprehensive wealth manager. 


Portfolio and Stock Analysis

Wealth management often includes analysis of specific stocks as part of building investment portfolios. Some managers may delegate investment authority to an outside manager, but many perform their own investment selection in house. If a Wealth Manager manages money in house, they may offer a portfolio of stocks that clients may be invested in. They also might select specific bonds and build customized bond portfolios within client accounts. Managers who outsource investment management may offer an “open architecture” strategy which involves picking broad based ETFs and mutual funds to build portfolios. In addition, some wealth managers have agreements with separate investment companies that become responsible for managing parts of client portfolios. These are often call “Separately Managed Accounts” or SMAs. Whichever strategy the wealth manager chooses, they will generally be the quarterback for their clients investments and the planning process is always informing the investment style regardless of which management style is used.