Private Wealth Management

Private Wealth Management

Private wealth management is the term generally used to describe highly customized and sophisticated investment management and financial planning services delivered to high net worth investors. This often includes advice on the use of trusts and other estate planning vehicles, business succession or stock option planning, and the use of hedging derivatives for large blocks of stock. Some more detailed services can include developing a plan to transfer assets to future generations upon a client’s death, recommending trusts that will accomplish a client’s purpose and to carry out their intentions, creating strategies that meet cash flow needs and minimize estate and income taxes, analyze risks associated with asset holdings and protect those risks, and establishing a plan of strategic charitable giving and assisting with implementation of that plan.

The term private wealth management was first used by the elite retail, or “Private Client”, divisions of financial services firms in order to distinguish themselves from mass market offerings. Some large financial firms have “tiered” their advisor platforms by using separate branch systems and advisor training programs to distinguish private wealth management from wealth management, with the latter term used to describe the same type of services, but with a lower degree of customization.

Private wealth management begins with the advisors identifying all of the factors surrounding and defining the client’s wealth. This includes the client’s short and long term goals and concerns, the structure of his or her holdings, and the client’s exposure and tolerance to risk. The private wealth management advisors then work with the client to construct, implement, and monitor an asset allocation strategy that will help the client achieve his or her financial objectives.

Today, many companies and leading universities offer seminars and educational programs for private investors with substantial wealth. The success of these programs indicates a market eager to become more informed about private wealth management.