Wealth management incorporates structuring and planning of wealth to assist in its growth, preservation and protection, whilst passing it onto its owners in a tax-efficient manner and in accordance with their wishes. It broadly brings together tax planning, wealth protection, estate planning, succession planning and governance with this responsibility often passed to companies or individuals known as wealth managers. The firm or individual would typically offer investment advisory, accounting, legal counsel, as well as other services associated with wealth management.
Wealth managers and wealth management firms often offer three major kinds of wealth management service:
- Investment Management. This service helps you to choose the best investments for your money. They will help you with choosing a broker that will place your money into the right investment vehicles, keeping in mind how much risk you can take and what kind of returns you want to have.
- Tax Planning. A professional tax planner can tell a client if it’s really necessary to undertake certain financial withdrawals because some categories of expenditures would no qualify o be deducted for tax purposes and well-earned money could go to waste in accrued taxes without any benefit.
- Legal planning is needed for most companies and individuals because it keeps everyone on the same page and allows individuals make decisions quickly. Absence of proper legal guidance could make a company go bankrupt.
These three kinds of wealth management services are critical as they can help individuals save money and invest them into something profitable.
For wealth managers, the landscape is changing faster than ever before. Wealth management has evolved significantly in recent years, with the rise of technology and the Internet having a profound impact on how client wealth is managed.
In the past, financial advisors relied on a rich network of relationship contacts and a comprehensive understanding of a client’s financial situation to provide them with sound guidance. Today, technology is changing the way we manage our money and invest, giving rise to new investment strategies and opportunities.
The wealth management industry has begun to recognize the importance of technology as a means to enhance their service offering. Greater use of technology gives advisors access to tools that enable them to serve their clients in powerful new ways. Advances in the wealth management industry are changing rapidly.
Over the past few years there has been a lot of focus on the improvement of Wealth Management through development and deployment of technology. It has been repeatedly seen that innovation is taking place in three areas. They include:
The use of technology to support ongoing client service, such as robo-advisors
The use of data analysis to improve client insights.
The use of technology for new asset class like venture capital or alternative investments.
Wealth managers and wealth management companies have had to evolve to help financial advisors leverage technological solutions to make their services more efficient and more effective. Modern wealth managers now adopt technological tools to:
1) Ensure they build, integrate and deploy technology quickly and efficiently, while insuring they maintain total control over the architecture and design of solutions;
2) Develop platforms to integrate with existing systems as siloed implementation can be costly;
3) Align incentives of technology developers with client’s needs;
4) Provide managers with tools they need to implement new technologies more quickly and effectively;
5) Create more powerful training programs that enable advisors get the most out of technology.