12 SEPTEMBER, 2017

What is Wealth Management?

It is a common notion that wealth management is financial planning. However, financial planning is just a small part and there’s a lot more to wealth management.

The goal of wealth management is to sustain and grow long-term wealth. From an affluent person's standpoint, wealth management is a science of enhancing their financial situation in a strategic manner. It is a continuous investment-advisory process that is a combination of financial planning, investment portfolio management and a number of aggregated financial services.It offers several strategies and plans that allow individuals or companies to attain all possible financial goals in a systematic manner.

Wealth management is a continuous investment-advisory process that is a combination of financial planning, investment portfolio management and a number of aggregated financial services. It offers several strategies and plans that allow affluent individuals or companies to attain all possible financial goals in a systematic manner

The accredited financial advisory professionals who guide the high-net-worth individuals (HNIs), small-business owners or families with support in retail banking, estate planning vehicles, legal resources, tax management, business-succession or stock-option planning, risk management, investment management, etc are "Wealth Managers".

Importance of wealth manager


Wealth management is an important practice, but not all investors have adequate knowledge of wealth management. Most investors perceive wealth management process to be a smooth ride. This is very different in reality, of course. Markets do not move in a straight direction, and unexpected factors usually get in the way of savings. This is where the expertise of a wealth manager can be put to use.

Wealth managers take advantage of their experience and knowledge, and regularly update and change their client’s investment profile based on where they are in their life cycle, with respect to other surrounding factors.

By examining the historical patterns of the portfolios, wealth managers estimate all possible outcomes around the long-term average return. Here, they measure risk as a probability that you won’t meet your financial goals and consider investing with an exclusive objective of minimizing this risk. This way, risk management becomes a central part of wealth planning process, and the probability of not reaching financial targets gets more attention than short-term losses.

Benefits of wealth manager/management

The job of a wealth manager goes far beyond just helping clients identify potentially profitable stocks, bonds, mutual funds, or managing investments, etc. Below mentioned are some of the essential benefits of having a wealth manager…

  • When you know where you stand, it becomes very easy to take decisions for investments and financial plans. A wealth manager can be of great support in providing the current status of your finances and offering a detailed analysis of your financial health.
  • A professional wealth manager brings a set of multi-disciplinary skills to the table, and greatly helps with allocating assets, tax optimization, savings goals, retirement, and passing assets to the next generation.
  • They help you determine the allocation of investments based on life’s realities, help you prepare for your retirement, help you with inheritance issues and transfer of assets, help you preserve and manage wealth, and so on.
  • A professional wealth manager can simplify confusing financial markets, and help you differentiate between good and bad investments.
  • No matter what level of assets you have, a wealth manager can help you in taking decisions for your charities and earning tax benefits out of it.
  • Comprehensive wealth management involves long-term strategic planning of your financial goals. A wealth manager effectively aligns your plans and objectives, and creates a road map based on your financial status, and sets realistic goals and strategies for the business to achieve your targets.
  • The assessment of the gaps between your goals and current financial status is necessary to help you plan your actions accurately. A wealth manager helps you conduct the gap analysis to evaluate your resources, strength and weakness. They also help you fill these gaps to meet growth expectations.

Getting your affairs in order is complicated. Allow us to help you simplify your situation. 

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Disclaimer: This Article is for information purposes only. The views expressed in this Article do not necessarily constitute the views of Kotak Mahindra Bank Ltd. (“Bank”) or its employees. The Bank makes no warranty of any kind with respect to the completeness or accuracy of the material and articles contained in this Article. The information contained in this Article is sourced from empaneled external experts for the benefit of the customers and it does not constitute legal advice from the Bank. The Bank, its directors, employees and the contributors shall not be responsible or liable for any damage or loss resulting from or arising due to reliance on or use of any information contained herein. Tax laws are subject to amendment from time to time. The above information is for general understanding and reference. This is not legal advice or tax advice, and users are advised to consult their tax advisors before making any decision or taking any action.