Young professionals may not immediately think of themselves as typical wealth management clients. However, high earners in areas such as finance, law, technology, medicine and entrepreneurship can quickly find their financial affairs becoming more complicated as their income and assets grow.
Use our wealth management finder to compare the best wealth managers for young professionals.
How To Choose The Best Wealth Manager For A Young Professional
The best wealth managers for young professionals should help you make the most of your earnings today while building a long-term financial plan for the future.
Minimum investment requirements
The first thing to check is whether you actually meet the wealth manager’s minimum investment requirement.
Some traditional wealth managers primarily target clients with £500,000, £1 million or more in investable assets. Others offer financial planning and investment management to younger clients who have smaller portfolios but high incomes and significant future earning potential.
Don’t assume that paying for private wealth management automatically produces better investment returns. For someone with relatively straightforward finances, a lower-cost investment platform or financial adviser may be more appropriate.
Long-term investment strategy
One of the biggest advantages young professionals have is time.
If you are investing for several decades, your wealth manager should build a portfolio around your long-term objectives rather than focusing excessively on short-term market movements.
Ask how portfolios are constructed, what proportion is invested in shares, bonds and other assets, and whether the investment strategy is active, passive or a combination of both.
Most importantly, make sure you understand what you are invested in and why.
Tax-efficient investing
As your income increases, tax planning can become increasingly important.
A wealth manager should consider how you use tax-efficient accounts such as ISAs and pensions alongside your other investments. Higher earners may also need advice around pension contribution limits, bonuses, company share schemes and other forms of remuneration.
Tax shouldn’t dictate every investment decision, but good financial planning can help prevent you from paying unnecessary tax as your wealth grows.
Planning around your career
Young professionals often have financial circumstances that change quickly.
You may receive large bonuses, become a partner in a business, exercise share options, sell a company or move abroad during your career. You may also have shorter-term objectives such as buying a property, getting married or starting a family.
A good wealth manager should therefore build a flexible financial plan rather than simply putting your money into an investment portfolio and reviewing it once a year.
Fees and value for money
Fees are particularly important for younger investors because they can compound over a very long period.
Compare the total cost of the service, including financial planning fees, investment management charges, platform or custody costs and underlying fund fees.
Then ask yourself what you are actually receiving for that money. If you are paying for wealth management, you should expect meaningful financial planning and ongoing advice rather than simply a portfolio of funds that could easily be replicated elsewhere.
Access and technology
Younger clients may also want a different type of relationship with their wealth manager.
Look at the quality of the firm’s app or online portal, how easily you can monitor your investments and whether you can communicate directly with your adviser when you need them.
Digital access is useful, but it shouldn’t replace personal advice altogether. Ideally, you should have both.
Building a long-term relationship
Finally, think about whether the wealth manager can continue to