Wealth management: what is it?

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How to precisely define wealth management and its actors? The task is not easy. The sector is transversal and brings together various activities. In short, wealth management advisors work with specialized establishments to find financial and real estate investment solutions for their clients.

Wealth management: much more than just a real estate advisor

There is often a tendency to confine wealth management to the sole management of real estate assets. In reality, this sector of activity is aimed at both individuals and professionals with securities as financial investments or works of art. Wealth management includes several activities:

financial investment advice,
life insurance brokerage,
pension and provident contract,
real estate transactions,
banking transaction intermediary,
fundraising,
service management,
heritage engineering.
Furthermore, a wealth management firm is not a management company, which is authorized to manage stock market portfolios.

Having assets, what is it exactly?

The term “heritage” literally refers to property “that comes from the father” (“ patrimonium ” in Latin). Currently, the patrimony of a person or a family designates all the property (material or not) on which a title or right can be asserted. Heritage can be transmitted, bequeathed, or even sold. Most often, one “inherits” the heritage of his parents (or members of his family), but it is quite possible to build up his heritage.

“Having assets” therefore includes:

land or real estate properties (land, building, property, etc.)
professional property (buildings assigned to operations, goodwill, shares of SCM, clinic, etc.)
financial investments (cash, securities accounts, savings, shares, bonds, SCPI, SCI, FCPI FIP).
furniture, household equipment, vehicles…
art or collectibles…
copyrights ; _
usufruct rights ;
patented inventions.
In wealth management, all of these possessions are called assets. The financial assets put together constitute a portfolio.

What do wealth management firms offer?

As mentioned in the introduction, wealth management is a multidisciplinary sector. Depending on his profile and objectives, an investor may need to use one or more services from a wealth management advisor. Wealth management revolves around four main areas :

the heritage audit;
heritage engineering;
open architecture;
delegated management.
Managing one’s assets means implementing various levers and mechanisms designed to grow one’s assets and protect the value of one’s assets. The establishment of a heritage strategy is often essential after a dismemberment, succession, or inheritance.

The heritage audit

This is the “entry-level” formula offered by wealth management advisors. The heritage audit consists of carrying out an inventory of your assets, but also your resources, your debts, your family, and your professional situation. This allows the adviser to get to know his client, to study his objectives, his appetite for risk, his investment possibilities, etc.

From there, the wealth management advisor will use the diagnosis of the financial situation to recommend a particular investment. The purpose of the wealth assessment is not limited to providing wealth advice. For the manager, it is a question of encouraging the prospect to go further in the process with the management firm.

Heritage engineering

Wealth engineering involves a whole field of skills:

asset management,

  • notary.
  • immovable.
  • taxation.

To analyze the profile of the investor and then propose the best investment and tax exemption solutions. The wealth

management advisor implements these solutions and ensures that they run smoothly over the long term.

Open architecture

This is about building your wealth management by expanding your investment vehicles. Rather than concentrating your assets within a single establishment, the wealth manager will intervene with several financial organizations. This is a fund offering, an approach open to the markets. For this, the wealth management firm enters into partnerships with management companies (social, FCP, etc.), which allows access to all asset classes.

Delegated management

Investors who opt for delegated management entrust the placement and monitoring of their movable capital to:

life insurance,
stock savings plan,
Retirement Savings Plan,
securities account, etc.

How is the management of a heritage organized?

An investor (individual or professional) who wishes to grow his assets or simply entrust the management of his assets to a third party can choose to go through a company or an independent firm.

Indeed, the title “wealth management adviser” is an umbrella term that brings together several professions: notary, tax expert, investment adviser, portfolio manager, etc.

Depending on the structure in which he operates, the wealth management advisor can have several statuses:

Liberal profession who exercises or owns a consulting firm;

An employee in a financial institution (bank, bancassurance, insurer);

Isurance broker ;

Notary chartered accountant.

We do not manage our assets in the same way when we are a business manager or liberal profession. For “big” capital, it is still best to turn to a private bank, a specialist in wealth management.

The activity of a wealth manager is organized in three stages. The first consists of an in-depth analysis of the client’s assets, which takes into account:

  • ہis family situation (married, single, dependent children, etc.);
  • Their professional situation (socio-professional category, level of income, taxation)
  • The economic situation via existing assets (real estate/financial assets, etc.)

These indicators will then be used to establish the client’s investor profile: risk aversion, objectives, targeted profitability, etc. As a reminder, financial institutions distinguish between three levels of risk: prudent, balanced, and dynamic. As for the objectives, they are established in the short and long term.

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