When Do You Cross The Threshold Into Wealth Management Territory?

28 February 2019
 Categories: , Blog

If you're already ahead of the game when it comes to saving, you may be wondering what else you can do to boost your net worth. The fact is, once you've reached a certain financial "critical mass," your investments can grow far more on an annual basis than the amount you contribute. Properly managing these investments and staying on top of market developments can be the key to optimizing risk. 

Many investors can find the services of a wealth management advisor to be helpful once they've reached (or exceeded) their ability to self-manage their investments. But how do you know if wealth management is right for you? Read on to learn more about the services a wealth management advisor can provide, as well as what you should consider when you're making this decision.

What does a wealth management advisor do?

Unlike stockbrokers or financial advisors who are employed by a financial institution, who may have access to only the investment products and solutions their own firm offers, wealth management advisors have access to a global range of products. This gives them the unique ability to spread your assets among a broad range of investments, giving you the most value for your money. 

Wealth management advisors will also work closely with you to identify your general goals and retirement plans so that you're well-positioned to tackle anything that might come your way. For example, if you've put aside a few hundred thousand dollars by age 30 and are hoping to join the FIRE (Financially Independent Retire Early) crowd, you'll want to grow your funds quickly and then move them toward a stable and low-risk allocation that will preserve these assets for decades. Meanwhile, if you're close to retirement and want a source of residual income in addition to your 401(k) balance, a wealth management advisor may be able to invest in certain real estate holdings that can provide you with regular dividends. 

What should you consider when deciding on wealth management services? 

Many wealth management advisors have a minimum investment balance for their services. While some require $1 million or more in assets, others have lower thresholds and may be able to provide you with scaled-down services even if your balances are in the low six figures. Meeting this threshold is the first step toward obtaining wealth management services, but you'll also want to consider your own investment expertise and how interest you are in self-managing your investments. While some find the investment selection process to be exciting, others are more than happy to delegate this responsibility to someone who does it as their full-time job.