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Wealth management: what is it and do I need it?

When your assets pass a certain level, managing them can become a job in itself.

Holding wealth in the form of cash can be inefficient, so you may want to make it work harder through investments (like opening a stocks & shares ISA).

However, managing a large portfolio of investments yourself can be time-consuming, even if you have the necessary expertise.

For this reason, many such individuals engage a wealth manager for advice to help oversee their assets as a whole.

Here's everything you need to know about wealth management.

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What is wealth management?

Wealth management is all about making the right choices for your finances - things like investments, tax planning, inheritance, and more.

Managing your money and assets can be tricky, but a good wealth manager can help guide you.

The aim is to help you feel financially secure and grow your wealth over time.

A wealth manager is a qualified financial expert who gives tailored advice to help manage your money.

Their goal is to support you in growing and protecting your wealth in the long run.

So if you need a helping hand with your finances, a wealth manager can be invaluable.

Many independent financial advisers specialise in wealth management.

Besides saving you time and effort, they can help you make the best decisions, select the best products, ensure that your portfolio remains aligned with your life goals, and that your wealth fulfils its potential.

What does a wealth manager do?

Here are the main areas in which a wealth manager can provide ongoing support.

Savings and investments

Your wealth manager can help you find the best balance of cash savings and other investments, based on factors such as your life goals, your attitude to risk, and other personal circumstances.

This will help you find the optimum balance between growing investments and accessible funds.

As your assets grow and your circumstances change, your adviser can rebalance your portfolio to suit your new situation and keep it aligned with your needs.

Your adviser can also help with other aspects of your portfolio.

For instance, if you want to invest in property, they advise you on the extent to which you can do this without jeopardising your other goals.

Your adviser can also help you create an investment strategy to suit your needs.

Your business

If you run a business you’ll probably use an accountant to advise you on its finances.

However, your wealth manager can work alongside your accountant to maximise the value it generates for you, and vice versa.

For example, they can help you find the best way to take an income, separate personal and business assets, and invest business assets effectively.

They can also advise on cash flows and budgeting.

Your pensions

As a higher earner, your pensions will be a cornerstone of your overall financial plan.

You will have the potential to benefit from higher or additional rate tax relief, and you may want to supplement any workplace pensions with your own arrangements such as a Sipp.

Your wealth manager can advise you on how to maximise the advantages of your pensions.

However, you may be vulnerable to both the annual and lifetime pension allowances.

Your adviser can ensure that you do not accidentally exceed these limits, and so help you avoid a hefty tax bill.

Tax efficiency

If you spend only some of your time in the UK and some of it abroad, it may affect how you pay income tax.

A good wealth manager should be an expert in expatriate taxes, helping you work out how much tax you owe in each country where you live and work, and ensuring you are not overcharged.

They can also advise you on your UK tax status and how to maintain it, and explain the practical differences between being resident and being domiciled in the UK.

Estate planning

Leaving an inheritance can be a major undertaking if you have a lot of assets.

Although it is possible to plan ahead to reduce the final inheritance tax bill, with a large estate you will realistically have to start taking action many years in advance.

Here a wealth manager can be invaluable, as they can start to reduce the size of your taxable estate in the most strategic way (often using trusts), while leaving you sufficient accessible assets to maintain your lifestyle.

How much money do I need to hire a wealth manager?

The cost of hiring a wealth manager depends on a few factors, but they typically work with high net worth individuals.

Many wealth managers require potential clients to have at least £500,000 or more in investable assets. Others cater exclusively to those with millions or billions in assets.

Charges and fees

As wealth management is generally an ongoing service, you will usually pay your adviser a retainer for their services.

This may be a regular flat fee, or a percentage of the assets under management.

This can work out more economical than paying a number of different fund managers to take care of multiple portfolios.

Talk about payment options at your first meeting with a prospective wealth manager.

Ask them to state their fees clearly, and to explain in detail exactly what you will receive for that money.

Also, don’t hesitate to shop around for a number of quotes and compare different costs and services.

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How do I choose a wealth manager?

Selecting the right wealth manager is key to getting financial guidance tailored to your needs.

When researching options, look for qualified professionals with relevant credentials like Chartered Financial Planner status.

Here are a few other things to consider when choosing a wealth manager:

  • Vet potential advisors thoroughly: Check reviews, explore their reputation online and with regulators. Choose an established firm with a solid history of serving clients like you. During interviews, ask about their clientele. Seek a wealth manager with experience managing finances for people in similar circumstances to yourself.

  • Discuss their investing strategies: You'll be trusting them to make portfolio decisions, so ensure their philosophy aligns with yours.

  • Find out what products and services they offer: See if they are restricted to certain proprietary options or have flexibility across the market.

  • Get clear on fee structures: There may be investment fees, advisory charges or other costs to factor in.

Most vital is finding someone you can trust and are comfortable with. This is a key relationship, so take time to meet with a few managers before deciding on the best fit.

Do your due diligence and you can find a reputable wealth manager well-suited to advise you.

Do I need a wealth manager?

Whether you could benefit from a wealth manager depends on several personal factors.

If you have clearly defined financial goals and feel confident selecting investments and strategies yourself, you may not require wealth management services.

Those with financial expertise who are comfortable directing their own finances may find a hands-on approach more suitable.

However, wealth managers can provide value to those who want professional guidance on growing and preserving assets.

Their insight and know-how helps clients develop a tailored financial plan.

So if you need specialist support to navigate investment choices, tax minimisation, estate planning and other money matters, a wealth manager's expertise can be worthwhile.

Consider your own financial proficiency, objectives and need for advice when deciding if enlisting a dedicated manager aligns with your situation and priorities.

Assess your requirements and options thoughtfully.

You can find specialist wealth managers in your area by selecting that option in the Unbiased search.


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About the author
Nick Green is a financial journalist writing for Unbiased.co.uk, the site that has helped over 10 million people find financial, business and legal advice. Nick has been writing professionally on money and business topics for over 15 years, and has previously written for leading accountancy firms PKF and BDO.