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What is Wealth Management?
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Posted On :
Dec-18-2012
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Article Word Count :
560
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Although people associate wealth management with the wealthy, everyone can benefit from the use of a financial advisor.
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Although people associate wealth management with the wealthy, everyone can benefit from the use of a financial advisor. Planning for investments that could help make retirement a reality and figuring out how to handle estate planning before financial issues are left for someone else to figure out is important for everyone who earns money.
A Brief Overview of Wealth Management
The core of personal wealth management focuses on handling investments for an individual, and each individual aspect of a person's financial life can be managed with the help of skilled financial advisors. Retirement and estate planning are two investment management needs that often require the assistance of a professional financial advisor.
A wealth management firm will assess a client's current savings and investments and make a recommendation based on this evaluation. Clients who are still working can choose to contribute money to the funds that are being managed on a regular basis.
Money that is being managed by a financial advisor will be invested based on the amount of risk that the client is willing to take and recommendations that the advisor has made. Funds that are a blend of stocks and bonds are typically the vehicle for investment, and the blend of stocks and bonds will influence risk. Younger investors are usually advised to take more risk, and investors near or at retirement age are advised to take less risk because they depend on their investments to pay for necessities.
Estate planning services offered by wealth management firms focus on keeping as much of the estate intact by managing tax liability in relation to the estate. Financial advisors are knowledgeable in the subject of tax law as it relates to investments and can help clients plan their investments in a way that benefits the client through limited tax liability and tax planning that avoids tax penalties.
Understanding Fee-Only Management
Some financial advisors offer personal wealth management services that do not require the advisors to sell investment tools to clients. This makes the goal of the advisor earning money for their clients instead of earning commissions through sales.
Advisors who work for a fee-only financial management firm are paid a flat rate of compensation that is not contingent on selling products to clients. Advisors have more motivation to work with clients to figure out a plan that will meet their clients' personal goals rather than selling products that do not necessarily fit the needs of a client simply to make a sale.
The bottom line in fee-only management is that it eliminates the possibility that there will be a conflict of interest. With the sale of products off the minds of advisors, advisors are free to put the needs of their clients first.
Wealth management is necessary for anyone who earns a wage and needs to save for retirement, build college savings for a child or plan an estate in order to avoid large tax penalties. Utilizing the services of a financial advisor is the best way to receive advice about investing and can help individuals manage investments in a way that provides stability for the future. Fee-only wealth management professionals tend to be more interested in the needs of clients than other advisors because their wage is not contingent on making commissions by selling financial instruments.
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Article Source :
http://www.articleseen.com/Article_What is Wealth Management?_240290.aspx
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Author Resource :
The author has an immense knowledge on personal wealth management. Know more about financial advisors related info in his website.
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Keywords :
financial advisors, personal wealth management,
Category :
Business
:
Business
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