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Is It Time To Turn Over Your Wealth Management To the Professionals?

  • April 9, 2020

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Turn Over Your Wealth Management To the Professionals

Running your own personal financial planning can be a rewarding experience, but it's not for everyone. While it's a great way to make sure you truly understand where your money is and what investments are performing best, it's also time-consuming for those with large portfolios or highly diversified investments. Bay Area wealth management advisors do more than just take the heavy lifting off your portfolio management, though.

They also give you the information you need to move more quickly into lucrative opportunities, and sometimes they can even provide access to investment vehicles you probably would have missed if left to your own devices. How? It's simple. It's their job. For those with mature investment portfolios or high net worth, advisors represent a cost-effective way to stay in touch with investment performance while spending a lot less time on research and tracking.

Wealth Management vs. Portfolio Management

Wealth management firms tend to focus on high net worth portfolios, with some placing the buy-in for services as high as $5 million or even more. There are options out there for those with account values as low as $250,000, but they are few and far between.

What Portfolio Management Looks Like

If your investments have not quite reached a threshold where wealth managers are ready to work with you, there's another option called portfolio management. Portfolio managers focus on opportunities within a narrow range of investment types, mostly stocks, bonds, and commodities. This can be a big help to those looking to grow their wealth more quickly, especially when their experience in the market has been tumultuous.

Related: Family Money: 5 Epic Ways To Grow Your Wealth

Benefits Of Wealth Management

By contrast, wealth management involves a full range of financial growth and planning services. That includes the establishment and administration of trusts to optimize a client's tax position, asset purchases designed to provide stability to the development of client wealth, and investment advisory services that go beyond basic stocks and bonds, tapping into markets like debt securitization and, for those with portfolios large enough, even direct investment in young companies that need stable funding to grow.

These extra opportunities have high buy-in costs, which is part of the reason they are more available when working with wealth management professionals than when investing on your own. They also require knowledge of the investment community around them, so professionals with the networks to bring those opportunities to you are a big part of getting started in those fields.

Related: 4 Things You'll Need To Do To Stay Happy, Healthy And Wealthy

How Much Does Wealth Management Cost?

For those with the high net worth investment accounts that wealth managers require, the cost of doing business with wealth management professionals can be quite low. Exact fee structures vary quite a bit from firm to firm, because they are often built around the class of investment.

Related: Financial Advisor: Why It's Worth Having One

That means even within one firm, you might have a rate that differs as you take on different strategies to keep your money growing. There are a few industry standards that can offer insight, though.

  • Costs for wealth management overall tend to be around one percent across the portfolio
  • Individual charges for services like trust establishment tend to be extra, they are based on the cost of outside contractors like attorneys
  • The larger the investment account, the smaller fees tend to be as a percentage of the total account value

If you want to learn more about the costs of wealth management services, the best thing to do is to get in touch with professionals near you. Discussing account management options and fee structures with them can tell you what rates are like in your area, providing a basis for comparison as you solicit more quotes. Start your search today, and get more out of your investments as you keep building your fortune.