What the Heck Is Wealth Management Anyway?

Business cards. Probably the cheapest form of marketing and advertising you can buy. My business cards have all the necessary information on them, including the name of my company, Lexington Wealth Management.

Sometimes I’ll hand that card out, the person looks at it, then after a brief silence I get asked, “What the heck is wealth management?”

Let’s start with the definition.

What’s the definition of wealth management?
Wealth management is a practice that combines financial planning as well as investment management for high net worth clients. It is a very holistic approach to an individual’s finances. It literally covers every aspect of money, investing and planning.

How does wealth management work?
It’s actually a very simple process once you see it in it’s entirety. It starts with a financial plan in most cases. A financial plan is blueprint for all the other decisions you will make about your money and your financial goals. It will identify any shortfalls and what you are doing well. Once the plan is developed, the wealth advisor implements various solutions for the goals or challenges presented by the financial plan. Once solutions are chosen, all that is left to do is monitor the plan and the investments and make changes as necessary.

Who can benefit from wealth management?
In a word…you. Virtually any person that has money to invest and goals to reach. If you have had any type of financial windfall, retirement, changed jobs,sold a business or piece of property, these are all great reasons to implement wealth management. Business owners and entrepreneurs have very complex financial situations, and wealth management is ideal for both. If you have a desire to pass wealth to your family or another charity, wealth management will help you accomplish these goals.

Who practices wealth management?
Most firms that have wealth management in their title practice wealth management. That’s not always the case, but it’s easier to find those firms and advisors. Most reputable wealth advisors have a Series 7 brokerage license. Many have insurance and financial planning credentials too. The two financial planning credentials are the CFP® (Certified Financial Planner) and ChFC® (Chartered Financial Consultant). Each require tons of time studying and multiple proctored examinations. While many advisors say they do financial planning, advisors with these credentials have made the extra commitment to financial planning, continuing education and their clients. These credentials give them the broad knowledge to be able to counsel clients on the broad information that wealth management involves.

So now you know what the heck wealth management really is! It can help you plan your finances, reach your goals as well as empower your decisions. I started in financial services over 21 years ago practicing wealth management. We just didn’t have the sexy name for it back then! If you loved my article, subscribe here for free. Why not force my virtual paperboy to throw them on your email porch every Friday?