Also known as Private Banking or Private Wealth Management, Wealth Management is about managing people’s wealth. The people in question are usually defined as high net worth individuals. ‘HNWs’ are generally defined as people who own financial assets over £1 million. Wealth managers provide comprehensive financial support for their clients. The advice they offer will be wide-ranging and varied. It can cover taxes and asset protection, investments to property advice. Of course they can’t be experts in everything - in many cases they’ll act as a ‘front’ for other departments in the bank, depending on the complexities of the services required. Wealth Management services are offered on a discretionary or non-discretionary basis:
Clients who opt for discretionary support effectively hand over their finances to the bank to manage. Based on pre-determined criteria, the bank will make investment decisions (perhaps through its Asset Management division) on behalf of the client and assumes responsibility for protecting and growing their wealth.
‘Non-discretionary’ means that, although the client receives advice from the bank, ultimate decision-making still lies with the client.
Within Wealth Management, there are three different roles: relationship Managers, Product Specialists and Investment Managers.
Relationship managers are the main point of client contact. They’re sometimes called ‘client executives’. It can also be a very complex role. The relationship manager needs a grounding in many areas:
- The services and products his or her bank offers
- An in-depth knowledge of the client’s own finances
- A full understanding of financial markets or other external factors that can affect either of the above.
This could include establishing trusts funds or the management of client assets such as stocks, bonds & real estate.
These are the people who develop the investment products and/or uncover the investment opportunities. There are many specialisms so here are just a few examples:
- Real estate
- ‘Financial instruments’ such as stocks, bonds, derivatives, equities and foreign exchange
- Alternative investments such as hedge funds
- Art and antiques.
The role of the investment manager is to directly manage the client’s assets. They will typically oversee a large number of client portfolios, which normally include a complex combination of investments. To do this they work closely with product specialists. So the responsibility of making the client’s money make more money ultimately lies with the investment manager.
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