How Private Wealth Management Differs from Financial Planning

Financial planning is important for everyone to think about. Good money management is not dumb luck, nor is it the kind of recognizable skill that would cause your relatives to say, “Oh, that little one is going to be great with money someday!” Actionable financial planning takes time, focus, and diligence. Not everyone has that by the time that they’re 25 or 30, but that’s okay. This is where having a finance professional taking a view from the outside in can prove to be a life-changing decision. A financial planner can help you to recognize the time value of money and set some good practices in place for your personal life.

Private wealth management takes financial planning several steps further. Generally, it begins with higher net worth individuals or anticipated future wealth. The more money you have, the easier it is to waste or lose. Wealth management seeks to allay those tendencies as it goes broader and deeper with financial goals that usually involve creating legal entities, tax strategy, and special account designations. Wealth advisors put a framework in place where not only do you have a budget, but your combined income gets invested based on a set of best practices to properly allocate capital.

Approaching money, capital, and asset management

Most people do not begin investing with well laid out financial goals. It’s usually a patchwork of ideas without any timetable or comprehensive plan. They may have some combination of:

• Savings account
• Bank CDs or money markets
• 401k(s), Roth or Trad IRA
• Employee stock rewards
• Stocks and ETFs
• A college savings plan, if children are under consideration. 

These are all intangible assets. Tangible assets, of course, include:

• Home
• Vehicles
• Watercraft
• Second homes, vacation homes, or rental properties
• Precious metals

If you haven’t accumulated a wide range of assets, high net worth, or a new family isn’t in your future, then a financial planner should be able to cover your needs. They will help you to set retirement, budgeting, and savings goals. The consulting costs will be based on an hourly rate or a fee. However, if you have a wider range of assets from both these lists, you should consider private wealth management.

Making sense of all the finance news is tough, especially if you’re trying to make an investment decision or a judgment call on a stock that has suddenly taken a nosedive. A wealth manager can help you create a tax strategy that can minimize the impact of investment losses and maximize the value of income generated from other securities without the high capital gains taxes. You can also look to private wealth management to give you a break from the balancing act of life and making good investment decisions.

The best wealth managers take a holistic approach to help you to plan for your future. This means that they don’t sell from a list of designated products they are trying to promote. They have more resources which can give them the independence to make sound decisions. These choices may not always mean a new sale for their firm, but they can help ensure stability in uncertain times.

Fund and portfolio management are different from wealth management

Fund managers sell from a list of products that their firm holds, or they have established agreements with other fund managers to promote a list of products to prospective investors. Portfolio managers work within the confines of a hedge fund, mutual fund, or private market fund to invest capital according to the fund strategy. For example, every mid-cap mutual fund portfolio is managed a little differently. They conduct market research on a continual basis to achieve the fund’s objectives. The fund’s legal entity itself may create and manage one or several funds. Broker-dealers and independent traders work directly with fund managers the most.

Choosing a private wealth manager

Private wealth management delivers multiple strategies at once to achieve the best possible experience for the investor. They will help work with you in areas like:

• Tax loss reduction
• Estate planning
• College savings
• Life insurance
• Real estate
• Retirement planning
• Elder care

Choose a wealth manager who will get to know you and can help you to address the important issues. Ideally, they can help streamline how you review your portfolio of assets while they provide expert investment advice. SD Mayer is a full-service wealth management firm based in the Bay Area. With decades of combined experience, they are committed to helping families just like yours, and are eager to help you address the intricacies of private wealth management. 

At SD Mayer, we give you a realistic view of private wealth management. Whether you are looking for specific investment management or more comprehensive wealth management of multiple assets, our team can provide the type of advising best suited to you.  In fact, we’d like to invite you to have a chat with us, over the phone or by contacting us online today

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