International Finance Magazine

  • Select Region

  • Your email Successfully sent Your not sent Successfully sent
  • Comments: 0

WEALTH MANAGEMENT

Wealth Management – A High Level form of Private Banking

Wealth Management – A High Level form of Private Banking

It is very clear that wealth management or the role of a wealth manager has assumed maximum importance and being considered a crucial and responsible role.

An individual can derive wealth in various forms. It is not just about having huge bank balances in your account or an inherited property. People who possess huge wealth usually opt for complex financial arrangements, wherein their assets are spread out and diverse in nature. An efficient wealth manager not only suggests taxation schemes for such assets but also gives tactful opinions for deriving more income out of such assets. However, in order to derive maximum income out of such assets the wealth manager needs to have in depth knowledge of the financial markets and the latest investment opportunities. Thus, it is very clear that wealth management or the role of a wealth manager has assumed maximum importance and being considered a crucial and responsible role. This form of private banking has assumed lot of significance since many HNW’s (high networth individuals) look for comprehensive financial support for their assets and also looks to derive maximum income from their net worth. The term wealth management is in use from the year 1933. Wealth management gives you insights on the right investment choices and it is an investment advisory discipline which includes financial planning, investment portfolio management and other financial services. Wealth management consultants or managers can help you develop actionable strategies for higher returns on financial aspects of high net worth individuals and firms who need advice on how to manage their wealth. Private wealth management involves highly customized investment management and financial planning strategies designed for specific individuals depending on the nature of business.

At Morgan Stanley, the “Private Wealth Management” division focuses on serving clients who are having investments of more than million. This includes business succession, stock option planning and the use of hedging derivates for large blocks of stock. Wealth management services are offered on a discretionary and non-discretionary basis.

Discretionary

Clients who opt for discretionary support usually handover all their finances to the bank, the bank in turn manages the wealth of these clients through their asset management division.

Non Discretionary

In this case, although the client receives the investment advice from the banks, but the decision making on making the investment lies with the client.

Who provides wealth management assistance?

Wealth management advice is provided by large corporate entities and independent financial advisors. They use their experience in estate planning, risk management and their affiliation with tax and legal specialists, to manage the diverse holdings of their high net worth clients. Many international universities offer wealth management education for private investors with substantial wealth. As per the details obtained from Euro money’s annual private banking and wealth management, below are the top ranked wealth management firms as on 2013.

Company

Ranking in 2012

Ranking in 2013

UBS

2

1

Credit Suisse

1

2

JP Morgan

4

3

HSBC

3

4

Citi bank

5

5

Deutsche bank

6

6

Merrill Lynch

9

7

Santander

8

8

BNP Paribas

7

9

Goldman Sachs

11

10

 

Huge Compensation

Private wealth managers make up to which excludes their recruiting bonuses which itself amounts to millions of dollars. If an active private wealth manager has around 50 client portfolios, then he can easily make around every year. Some of the services rendered by private wealth management professionals are mentioned below:

  • Investment Advisory Services
  • Trading, Hedging and Security Services
  • Wealth Advisory Services
  • Estate Administration Services
  • Private Banking and Lending

Technology as a wealth management solution

The latest trends in wealth management are the investment advice being digitized, with wealth managers offering retirement calculators online and basic financial planning tools to clients online. Digital technologies have now demystified the art of financial advice, by offering automated advice based upon a quick assessment of the investment objectives of their clients. Some companies like Wealth Front and Personal Capital, as well as wealth management giants like Schwab, who are increasingly offering tailored services for a fee. However, the success rates of such online solutions remain very low due to the tools non-intuitive design and their lack of a clear call to action. Wealth management firms that consider client requirements are best positioned to prosper in the decade ahead.


  • Your email Successfully sent Your not sent Successfully sent
  • Comments: 0

Latest Comments