Traditional wealth managers help you invest large amounts of money and can also provide advice on tax, international investments and complex portfolios and are more suited for those with over £250k to invest.
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Wealth Management Explained
Wealth managers are an individual or company that helps you invest for your future via a tax-efficient pension, ISA or general investing account. In this guide we have split wealth managers into two categories, digital wealth managers (for small and new portfolios) and traditional wealth managers (for larger portfolios).
Wealth managers can help you invest your assets in a wide and varied set of investments and instruct you on the best course of action for tax efficiency in your businesses or handling inheritance and they can also help you out with sound financial planning for retirement.
Their day to day responsibilities will vary depending upon which type of wealth manager you choose. If you opt to employ the services from a larger, well established, firm then your wealth manager may more closely resemble a client manager that prioritises communication with yourself and other clients and leaves the investment and detail of the work to teams within the organisation.
However, if you opt to work with a smaller wealth management firm then you may find that you have more interaction and influence over what happens with your money and they may be more hands-on with your investments and finances.
Asking questions about who will be managing your money, who you will be liaising with and how much input you’ll have throughout the relationship are all questions you may want to ask when you are approaching potential wealth managers if you want to be sure that you get the type of manager and service that works for your needs.
Many independent financial advisers also offer wealth management services which can help you find the best returns. The finder form here includes both wealth managers and financial advisers who could help you with your needs.
Wealth manager charges & fees
Wealth managers and advisers will normally charge you a fee as a percentage of the total value of the assets they will be managing. Depending upon the experience, expertise and specialisms of the wealth manager this could be anywhere between 0.5% – 2.0%.
Some will also charge a commission on top of fees, which is a percentage of the return investments that the wealth managers are responsible for will take.
This will generally be lower than the actual fees and could even drop if you invest larger amounts with them.
Wealth managers can help with changes in your finances
You may have come into money quickly perhaps via an inheritance, through investing or trading or perhaps you’ve received a windfall through a large bonus from work.
Whatever the reason, if you’ve got access to a large amount of money at one time it may be something that you feel you need help with. A wealth advisor could offer viable strategies and options to help you earn the best returns on your money while being a single point of contact for you to liaise with.
In this instance calculate how much you have available to invest and in what forms before you get a quote.
Tax planning with a wealth manager
Finding ways to reduce your outgoings earned from assets or from investing is one way to ensure that your investments are worth more to you over time.
If you have a varied and diverse portfolio including traditional stock market investments, property and business interests it can be both complex and time consuming to ensure that your tax affairs are as efficient as possible.
You might find that a wealth manager is the simplest solution to your problem and that the tax savings they can offer you are worth more to you over time than the fees they charge.
A wealth manager could work with your accountant in your business and utilise tax-efficient investments like your pension to unlock tax relief in financial years to come.
If you are older, they could also help insulate your taxable estate assets as much as possible from tax for beneficiaries.
Consolidation or expansion of several financial accounts
If you are a self-managed investor and have been active for some time, you may have active accounts with several different services and with many brokers, using multiple brokers can end up becoming difficult to manage.
Difficulty may arise if you are manually and personally trying to keep track of every investment in each account and it could mean higher costs overall by keeping your investments separate over consolidating them together.
You may find that it is substantially cheaper and more time-efficient to find a wealth manager who can take over and consolidate investment activities.
This could be especially true if you have assets outside of traditional financial investments to look at too.
A wealth manager could help you to achieve this consolidation and ensure that it is done so both quickly and cost-efficiently.
Retirement planning with wealth management
Retirement planning can be complex but a wealth manager could help you strategise your retirement in advance and ensure that you have a strategy to unlock the value in your assets efficiently and in a timely way to last throughout your retirement years.
A good wealth manager can help you to;
- Understand how much you will need to maintain your lifestyle into retirement
- Ensure tax efficiency on your pension balance
- Manage and consolidate savings, investments and more towards your pension pot
- Locate and consolidate your forgotten pensions held by multiple providers
- Taking a steady income throughout your retirement so you can maintain your standard of living
- Explain retirement options for your income after you stop work
Retirement can be a time when you have the opportunity to access the most money all at once than ever before, getting the advice from an expert in advance of and during this critical process can help ensure that you are in the best possible position when you can retire.
One-off advice from a wealth manager
One-off wealth management advice can help many people improve the overall health of their assets and finances.
A wealth manager or adviser may be able to help you reduce your taxable income if you have completed a tax return and are facing a bill larger than you expected.
An independent financial adviser may be able to help you identify suitable investments to take on if you have suddenly come into some additional capital, through inheritance or via other means.
You can usually find wealth managers or financial advisers who can work with you on a one-off basis or advise or manage your wealth until it is safely invested on your behalf.
The arrangement of payment for the services of your wealth manager will vary depending upon your needs but many are usually willing to work for a one-off fee.
Wealth management vs private banking
Wealth management is a type of financial management arrangement where a wealth adviser or manager is tasked with taking over your portfolio to ensure that it gains value, is taxed efficiently and you are gaining the most value from assets like property too. They could also help you plan your finances for retirement.
Private banking usually involves financial institutions offering select services and products to customers with high net worth or clients they would consider as “exclusive”. Different financial organisations will have different thresholds and conditions on who they would consider high net worth individuals and high-value clients.
Benefits for private banking clients could involve better rates, investing advice and access to services faster.
Wealth management vs financial planning
Financial advisors offer advice on investment advice in return for financial compensation. Their services only rarely extend into account management although so do offer more hands-on services.
Financial planners can also advise on things like budgeting, cash flow, saving and investing. Unlike wealth managers, they don’t offer services only to highly wealthy individuals and would be more likely to work with someone whatever their overall financial status.
Wealth management vs investment banking
Investment banking is the arm of a bank responsible for investing assets and creating capital returns on behalf of governments and businesses.
Investment banks are normally subsidiaries of retail street banks like Barclays and HSBC.
These retail banks tend to use “investment banking” as the coverall phrase to explain their activities in investing.
Some investment banks offer services to clients like investment management and investment ISAs but their services are not as far-reaching as those which a wealth manager would be able to provide.
Wealth Manager FAQs:
Wealth management services can be offered by large well-known investment firms like Hargreaves Lansdown but are also available from smaller and more localised firms and professionals. Complete the form to request a callback from the wealth managers listed in our comparison table.
A.Wealth managers make money by charging an upfront fee for managing your money or by taking a commission from the returns on the investments they make on your behalf. Fees and charges will vary by wealth management firm and depending upon the size and composition of your portfolio.
You can choose the best wealth manager for your needs by comparing multiple quotes and services. Good Money Guide can help you obtain quotes from multiple wealth managers by completing one form with some details about the services you require.
Unless frequent face to face meetings are very important to you selecting a wealth manager by comparing only those closest to you may mean you miss out on the best service and ultimately the best performance and returns on your assets.
We compare some of the best known and most well-recognised wealth managers in our comparison table. They are all authorised and regulated by the FCA and can provide personalised quotes upfront based on your needs and to allow you to check them against each other.
Online wealth managers may be a better option if you have a smaller portfolio to manage. Many traditional wealth managers only work with clients who have above a minimum threshold for them to work with, for example, £100,000. Alternatively, a one-off wealth management consultation may better suit your needs. When you compare online wealth managers, check they are fully registered with the FCA and check reviews and testimonials to ensure that they are reputable and trustworthy.
Ensuring your wealth management firm or wealth adviser has the necessary regulatory license and the relevant qualifications and expertise should be amongst your highest priorities when choosing who to trust your finances with.
They will have deep knowledge and, in some cases, access to every area of your finances within their role as your wealth provider. Even if you trust them completely you should ensure that the firm they represent or as an individual are listed on the FCA register as well as regulatory information it will also provide personal and contact details of those in the business, certification details.
You may also wish to ask your prospective wealth managers for details of any other certificates or qualifications they may have, for example, are they registered as a chartered wealth manager with recognised bodies like;
- Chartered Institute for Securities and Investment
- London Institute of Banking & Finance
- Chartered Banker Institute (CBI)
- CFA Society of the UK
As well as upholding investing and advisory best practices, chartered wealth managers will normally have a set of ethical and professional standards to uphold as part of a code of conduct and client management best practices.
It can be a good idea to familiarise yourself with things like complaints procedures, disciplinary handling and their code of conduct policies if you are choosing a chartered service.
A number of brokers such as Freetrade offer commission-free trading. However, it’s important to be aware of other costs. Freetrade, for example, charges £3 per month for its Stocks and Shares ISA and £9.99 per month for Freetrade Plus (which offers access to more investments). It also charges FX fees of spot rate +0.45% on international shares.
In terms of investing in funds, some brokers such as Hargreaves Lansdown allow you to buy and sell funds commission free. However, these brokers generally charge an annual custody charge on fund investments. Hargreaves Lansdown, for example, charges 0.45% per year on fund holdings up to £250,000.
Yes, we run an annual awards for the best wealth manager and you can read our wealth management reviews and interviews online.
This is tricky but very often the best place to start is the website of each wealth management service you are considering. Looking out for reference points such as client satisfaction survey results, confidence scores and even awards they’ve won for performance, client services as well as regulatory information.
Yes, you can look at performance tables and results of their team of fund managers if they represent a larger organisation.
Checking the past performance of smaller wealth manager isn’t easy though. As their activities take in such a wide-reaching approach to wealth creation that gaining specific insights can be very difficult. However, they should be able to provide you with some indication of their historic success stories and client testimonials.
Like any service people pay for, wealth managers are only worth their fees if the advice they offer you is effective.
The cost of getting a wealth manager may be more of a worthwhile investment if they can save you time or money.
For example, if you lack expertise in investing then paying someone to take that on for you and make your current investments even more profitable likely makes sense.
Likewise, if you are a confident investor but struggle to properly manage all of your investments due to the size of your portfolio or because it is spread across multiple brokers then paying someone else to take responsibility for managing it may make a lot of sense.
Of course, you will need to find a wealth manager that you feel confident in and that you trust to take over this financial management for you.
Wealth managers can also help by taking the emotion out of your investing activity. Without realising it, your investment activity could be heavily biased towards one type of instrument or market and the “good” returns you’ve been earning through them could have the potential to be much better by investing the money elsewhere. A good wealth manager will keep on top of these opportunities and help determine which ones are right for you.
The other consideration when making your decision is the risk of stock market investing, the value of your investments could go up or down and stock market downturns could impact your wealth despite the best efforts of your wealth manager.
How do you keep in touch with your clients?
It wouldn’t be wise to choose a wealth manager on the assumption that you will have a weekly face to face catch up with them if they are unable to offer this or only deal with clients over the phone after an initial introductory meeting.
What are the services do you offer?
One question you will want to ask is whether wealth managers offer the right services to suit your needs. It would be pointless signing up the services of a wealth manager without first ensuring that the services they offer meet your specific needs.
Is it Clear What I am Looking for and Want You to Take on?
While bringing on an expert to help you can be beneficial in helping you to find new perspectives on personal wealth generation you also need to make sure that the wealth manager you choose fully understands your outlook.
If you are looking for long term returns through property investments and short term gain with steps to keep business taxation affairs efficient but your wealth manager focuses on investing as the primary strategy, neglecting the methods you see as important, then you may find you wish to switch to another sooner.
Be clear on your aims and goals upfront and ensure that you ask them about their preferred areas of expertise and focus.
How much do you charge & what is your pricing model?
You will need to be completely clear on pricing upfront, as this will help you better compare wealth managers that can help you.
Understanding whether wealth managers operate on a flat fee or commission-based payment model will also help you to understand which offers the best value for money based on the overall value of your portfolio.
Pricing, how often you are charged and what forms of payment they accept is something that wealth managers should be clear on with you upfront.
Wealth managers will normally have a minimum value or fund that they are willing to take on. You should check what this is when making contact with potential managers. If your net worth is lower than they normally work with, other services may better suit your needs.
You should get a wealth manager if you need help managing your wealth if you are not confident in managing it yourself.
It is important to remember that many wealth managers and advisers have a “minimum asset” requirement that their clients will need to meet before they will consider taking them on.
To establish your assets, you need to consider all of the assets you have as savings, investments, within ISAs, bank accounts and in property.
Depending upon your circumstances, your income may also be something that you can factor into your calculations. However, it is worth including only your disposable income, after regular monthly outgoings like a mortgage, household bills and any other regular outgoings.
If you have a large salary but also pay out large amounts each month then your salary, even if it is large before tax, may not add much to your overall wealth.
Once you have an idea of the total worth of your assets you can begin to determine the breakdown of these assets.
Understanding where most of your money is held could help you determine which specialist wealth manager is best for you. For example, if you have a large amount invested in property, working with one which specialises particularly in property asset wealth management.
Minimum asset values will vary by the manager, some may suggest a minimum of under £100,000 whereas others may only look to offer their services to those with £500,000 or more.
The easiest way to find out is to enter your details via our wealth manager finder service to get a no-obligation quote.
Our user submitted Q&As can answer your questions around when you should get a wealth manager.
Yes, but be aware of exit fees.
Whether you are trying to save on costs, think that your portfolio is under performing or you have found a better deal, the following tips may help your transition run more smoothly.
- Read the terms and conditions of your existing agreement – check to make sure that there aren’t clauses that need to be met before you can part. There will normally be a formal withdrawal process for you to follow if you wish to switch away from your current manager. Officially declaring your intent to withdraw your portfolio from their management service is normally achieved by delivering a signed letter instructing them of your wish to leave to your manager.
- Collect investment records and transfer them to your new wealth management provider. Your old wealth manager will be required to give you this information but you should ask for copies of these in your letter to help give you a chance to review them. It should also give you a chance to fully understand the costs and true performance of your portfolio if this has been a concern. Normally, funds can be transferred quickly and simply through automated systems like ACATS (automated customer account transfer service). In some cases, these automated transfer services may mean you do not have to let your existing provider know that you are leaving.
- Find out about sales or transfer charges – check with both your old and new provider, before you switch, whether or not you will face any transfer fees or charges in addition to the management fees. Some investments require fees to be paid for exiting early or new investments may need to be made if they’re unavailable with your new firm. These extra costs and charges are best to consider before you finalise your switch so that you can account for them upfront.
Take your time when you switch from one provider to another and ensure that you read contracts and terms and conditions carefully. Do not allow yourself to be rushed into deciding before you fully understand the implications, costs and terms and conditions of doing so.
Choosing the right wealth manager will be very different depending on your specific requirements. There will rarely be a single “best” wealth manager for every individual as your needs will differ greatly from someone who has different assets and investments to manage than you do or has different goals in mind to you.
However, there are several ways that you can ensure that you are making the best decision in regards to who will be managing your money.
- Think about who they want to work with – like any company wealth managers may specialise or consider themselves experts in a certain field. True, they should all be able to offer sound financial advice on all of your assets, investments and accounting but some may specialise in certain fields more than others. A wealth manager specialising in property portfolios would be better suited to managing the assets of a property investor than one with an accounting background that may better suit a client with a high number of business interests to keep track of.
- Check their pricing – the fees and charges matter, if your wealth manager is promising huge returns but charging enormous fees it may mean taking them on is less financially beneficial than an adviser quoting lower fees.
- Compare the services they can offer – wealth managers generally offer a varied spread of services to help your money grow. If there is something that you need like access to an online portal or weekly face to face meetings but your shortlisted wealth manager cannot offer this it may be considering looking at others that could offer this.
- Look at their performance – finding performance tables for specific wealth management firms is difficult as details are very rarely publicly shared. If you are interested in hearing about your wealth manager’s successes you should ask them about their strategies and how their implementations have benefited their clients. Checking fund manager performance tables is a good check to carry out, especially if you are looking to invest.
- Check they are regulated – ensuring that your chosen wealth manager is regulated to operate in the United Kingdom, even if they are based abroad is also sensible. Use the FCA register to ensure that the firm or manager you are working with is authorised and regulated and ask them to provide proof of qualifications or experience before you make your final decision.
- Find one near to you – if regular face to face meetings with your wealth manager is important to you then you may want to base part of your decision on wealth managers near to you. Alternatively, if you’re happy catching up via telephone or through email or their online portal then proximity may be less important to you. An initial face to face meeting will normally make sense, but choosing a wealth manager simply because they are closer to you may not be the best decision.
- Consider how often you will want to meet them – if you would prefer regular face to face meetings and performance reviews then it makes sense to choose a wealth manager within a commutable radius of your home or business. You will also need to be upfront about the number and frequency of meetings you will want with them and find out whether they can offer this. It would also be worthwhile finding out if you’ll need to travel to their office for these meetings or if they are happy to come to you and the difference in pricing if both are possible.
- Choose a wealth manager you can build a rapport with – if you are going to be trusting them with your assets and investing then you will preferably want somebody that you can get along with. This may not seem like the most important factor initially but it will help to have someone you feel comfortable with, especially if you will be working with them over a long period. Here are some questions you can ask wealth managers you speak to that can help you get to know them.