Understanding wealth management

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Wealth management is a service offering personalised advice for individuals with significant financial assets. While investment strategies are at the core of what wealth managers do, their services often extend to areas like pensions, retirement planning, and inheritance. In this guide, we’ll discuss how wealth management works, who can benefit from it, and whether it might be the right choice for you.

Wealth management is a service designed to help clients grow and protect their financial assets. Investments are a key consideration when managing wealth, but it also covers a variety of aspects relating to a person’s overall finances. A wealth manager might offer personalised strategies and advice to help their clients achieve their financial goals. The main objective is to get the client’s wealth working for them.

Any affluent individuals with significant financial assets may benefit from using wealth management services. These people often require specialist advice that meets their unique and often complex financial needs, and they often don’t have the time to manage their wealth themselves.

While each wealth management firm offers different services, they generally focus on managing savings and investments, planning for retirement, and passing on assets in a way that’s tax-efficient.

The information provided here is for informational and educational purposes only and does not constitute financial advice. Please consult with a licensed financial adviser or professional before making any financial decisions. Your financial situation is unique, and the information provided may not be suitable for your specific circumstances. We are not liable for any financial decisions or actions you take based on this information.

Wealth managers typically offer four main services: financial planning, investment management, estate planning, and tax planning. To meet the wide-ranging needs of their wealthy clients, some firms also assist with pensions and retirement planning.

1. Financial planning. Wealth managers can help provide structure to the client’s financial plans and come up with a strategy for achieving them. 
2. Investment and savings management. A wealth manager can identify investment opportunities or manage an existing portfolio. They’ll typically adjust the investments based on the client’s goals and how much risk they’re willing to take.
3. Estate planning. Wealth managers can help with organising an estate, making sure the client’s assets are passed on according to their wishes. While they don’t usually draft the will itself (that’s usually for a solicitor), they can assist with the necessary planning. 
4. Tax planning. Wealth managers can also assist with managing a client’s tax affairs. They’ll make sure the client is taking full advantage of the tax relief available to them, and ultimately help minimise their tax burden.
5. Retirement and pension planning. Some wealth managers also offer advice on pensions, including more complex options like approved retirement funds (ARFs). They work to get more for their clients’ retirement years.

To provide a comprehensive service, wealth management firms often work with experts in other fields, such as lawyers and accountants. That way, they can also support clients in complex situations such as divorce. Involving a whole team of experts ensures the client can rely on support in one place.

For corporate clients, wealth management services tend to focus less on tax planning and estate planning, as these are more relevant to individuals. An individual needs to plan for passing on their assets, but a company typically will not typically face the same concerns.

When you look at a definition of wealth management, you might notice some similarities with financial planning, but they’re not quite the same. Financial planning is typically just one part of wealth management, with a focus on more immediate financial goals.

A financial planner will typically examine a client’s day-to-day finances and help you find ways to achieve a specific goal. Say you’ve acquired some debt that you’re struggling to pay off, and you want to be able to put that money aside in savings. That’s the kind of situation a financial planner can help you with. They will work with you to come up with a plan for tackling that debt.

Wealth management takes a broader view of a client’s finances and deals with anything related to their financial life. A wealth manager’s job is essentially to make sure that all aspects of a client’s finances are working well together.

Deciding whether to use wealth management services really depends on your financial situation and how confident you are with managing your wealth yourself. 

Advantages of wealth management:

• Expert guidance on investment, tax, and estate planning.
• A personalised financial strategy tailored to your goals.
• It can save you time, giving you more time to focus on other things.
• Access to specialist knowledge and financial products.

Disadvantages of wealth management:

• Fees can be high. Wealth managers can charge flat fees, hourly rates, or commissions on investments. For smaller portfolios, the fees can be relatively high compared to the size of the assets managed.
• You may be able to manage your wealth yourself if you have the financial skills and prefer the hands-on approach.
• Not all wealth managers offer the same level of expertise or service, so it can take some time finding the right one for you.

If you have significant assets but limited time or expertise, professional wealth management could be a worthwhile investment. However, if you’re confident with selecting investments and strategies and handling your finances, or your investment portfolio is fairly small, you might prefer to take the DIY approach. Raisin Bank offers a range of articles where you can learn more about investments.

In Ireland, wealth management services are usually aimed at high-net-worth individuals, though the exact amount needed can vary depending on the provider. Many wealth managers will require potential clients to own at least €250,000 to €1 million in investable assets, which typically include cash, stocks, bonds, or other easily managed investments. Property and business assets usually won’t be considered in this calculation.

Eligibility will also depend on the level of service the client wants. While exact sums vary from one firm to the next, the general thresholds are as follows:

• Bespoke wealth management: Often requires a minimum of €1 million in investable assets.

• High-net-worth wealth management services: Typically available for clients with at least €250,000 to €500,000 plus in assets.

• Tiered services: Clients with fewer assets may still access financial planning or investment advisory services, but they won’t need full-scale wealth management.

Those who are asset-rich but time-poor may benefit the most from leaving the management of their wealth to professionals. So now you know what wealth management is, what are the credentials to look for? You might start by thinking about the exact services you’d like help with. Are you unsure where to invest next? Are you coming up for retirement and looking to adjust your investment strategy? This will help you identify exactly what you’re looking for in a wealth management firm.

When it comes to wealth management in Ireland specifically, you might seek out wealth managers who are regulated by the Central Bank of Ireland and hold recognised qualifications such as the QFA (Qualified Financial Adviser) or CFA (Chartered Financial Analyst). These certifications ensure that your wealth manager has the necessary skills and knowledge to manage complex financial situations.

Yes, banks and other financial institutions do offer wealth management services, but the way they do it can vary. Some wealth managers work independently, while others are part of large firms, including banks and investment companies. They may have different job titles, such as financial advisers or consultants, but their fundamental role is the same – helping clients manage their wealth.

A client might work with a single dedicated wealth manager or have access to an entire team, depending on the firm. Some advisers specialise in investments, while others focus on areas like estate planning, credit options, or insurance, depending on where they work.

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