The vast majority of high net worth individuals will be those who already have some measure of financial acumen. They’ll know how to save and look after their money properly; after all they’ve got to where they are now with their own financial knowledge. They may not however, know how best to use the wealth they’ve accumulated in order to make their worth grow in the future. In short, they may need some advice when it comes to making investment and planning decisions, and this is where wealth management companies come in.
Purpose
In the past, wealth managers were there to ensure the safety of large funds of money, but these days the majority are focussed on helping their clients wisely invest their fortunes, guarding against changing markets and planning for the future. This includes both things like financial trading and developing a portfolio but also major decisions such as pensions and the products associated with them. The best companies will sit down with you and discuss where you want your finances to go and how you’d like to progress them, ultimately searching for the best solution and recommending or executing it for you. Many people have the idea that you hand over your money to an investment firm, and they do whatever they think best with your money. In reality, this is not the case; wealth managers are generally there to help guide you and support your wealth planning – you’re not at the mercy of their investment decisions.
Benefits
Some may well question the value of using a wealth management company when you could actually access all of the products and investments on the market without them. The simple fact however is that it takes significant training and knowledge to be able to decide the optimum course of action. And the optimum course could well be one that sees a significant positive effect on your net worth. Conversely, poor investment decisions can leave you with gaping holes in your portfolio. This does also mean choosing the right company – look for award winning businesses like Sanlam so you know you’re in good hands.
Ultimately, choosing to use a wealth management company, or even an individual adviser, is a big and personal decision to make. But in general, they can help to both increase your fortunes, and plan for money at every stage of your life for a comparably low cost of retainer or percentage. If you’re a high net worth individual, then it really does make sense.