Wealth Management is an investment advisory discipline that incorporates financial planning, investment portfolio management and a number of aggregated financial services. High Net Worth Individuals (HNWIs), small business owners and families who desire the assistance of a credentialed financial advisory specialist call upon wealth managers to coordinate retail banking, estate planning, legal resources, tax professionals and investment management. Wealth managers can be an independent Certified Financial Planner, MBAs, Chartered Strategic Wealth Professional, CFA Charter holders or any credentialed professional money manager who works to enhance the income, growth and tax favored treatment of long-term investors. Wealth management is often referred to as a high-level form of private banking for the especially affluent. One must already have accumulated a significant amount of wealth for wealth management strategies to be effective.
Wealth Management education for private investors with substantial wealth is offered by several leading universities. The first such program was offered by the American Academy of Financial Management who offers the CWM Chartered Wealth Manager Program and then the Wharton School of the University of Pennsylvania. Since 1999, over 5000 people from over 100 countries have completed the AAFM CWM Wealth Manager program. At Wharton, 520 investors from 29 countries have completed the course. The five-day program is offered twice a year and is a continuing partnership with the Institute for Private Investors. Both the University of Chicago and Stanford University also offer 5 day programs. In 2009, Columbia University offered a three day program on value investing designed for high net investors Wealth management can be provided by large corporate entities, independent financial advisers or multi-licensed portfolio managers whose services are designed to focus on high-net worth clients. Large banks and large brokerage houses create segmentation marketing-strategies to sell both proprietary and non- proprietary products and services to investors designated as potential high net-worth clients. Independent wealth managers use their experience in estate planning, risk management, and their affiliations with tax and legal specialists, to manage the diverse holdings of high net worth clients. Banks and brokerage firms use advisory talent pools to aggregate these same services.
The events of 2008 in the financial markets caused investors to address concerns within their portfolios. “The past 18 months have a challenged traditional thinking about investing and asset allocation, diversification, and correlation. For individual investors, risk tolerances have been tested, investment assumptions have been overturned, and fundamental truisms have been questioned. For this reason wealth managers must be prepared to respond to a greater need by clients to understand, access, and communicate with advisers regarding their current relationship as well as the products and services that may satisfy future needs. Moreover, advisors must have sufficient information, from objective sources, regarding all products and services owned by their clients to answer inquiries regarding performance and degree of risk-at the client, portfolio and individual security levels. "This state of affairs poses a dilemma for wealth managers, who, for a generation, have adhered to the core principles of asset allocation and earned their keep by preaching the mantras of 'buy and hold', 'invest for the long term', and when things get tough, 'stay the course'.
Today wealth management advisors must have access to an objective content repository. This repository must contain a current and readily available profile of the client's holdings.