Ideally, you engage a wealth manager before the questions surrounding your wealth and your goals become a weight on your mind.
Most people understand the importance of managing wealth and the decisions surrounding it. But when it comes to the role of a wealth manager, the benefit they can provide and when to engage with one, there is often a need for more education.
Part of that stems from the challenge of defining the role of a wealth manager, says Katherine Waller, head of new business and relationship manager at RBC Wealth Management in London. It’s not surprising since the financial services industry is filled with different terminologies – independent financial advisor, investment manager, private banker, relationship manager – often used interchangeably, but not interchangeable in terms of the depth of service they can provide.
A wealth manager, explains Waller, encapsulates all those roles. “They’re the conductor of the orchestra, including the planning of what comes next and the thought process around all your priorities as an individual or family.”
For the majority of high-net-worth individuals (HNWIs) – whether they’re business owners, busy executives or parents juggling family life – there is value in sitting down with a wealth manager. And understanding the role of wealth management professionals makes it easier to know when to engage.
Life is full of milestones and transitionary moments, and those pivots and changes have a tendency to raise questions about where you’re at in your life, financially speaking. “Every stage of life’s journey comes with a linked financial event that you could quite easily see as the trigger to engage with a wealth manager,” says Annabel Bosman, head of relationship management for RBC Wealth Management in the British Isles.
She points to anticipated triggers such as starting a new job, buying property, establishing or selling a business, transitioning wealth to children or grandchildren or succession planning. Other triggers might be expected but harder to plan for, such as a sudden move across a border for work or a death in the family. All these things are likely to prompt questions surrounding wealth, says Bosman. Many HNWIs already have a relationship established with a financial planner, an accountant or lawyer. But when managing finances grows beyond your current team’s capabilities, it’s time to consider talking to someone who can coordinate and meet all those needs. “When you have those sorts of internal questions and it becomes challenging for you to answer them on your own, [then] what you need is to pull somebody in.”
Bosman says she often comes across scenarios in which a client has experienced one of these transitionary moments but is hesitant to engage. That intimidation factor is especially prevalent in cultures or families in which talking about finances isn’t always socially acceptable. “For a lot of people, it’s quite a scary thought … as though the worry is that you are going to show a lack of understanding or a lack of planning,” she says. “But the reality is: For most of us, we experience these things once in our lives, so there’s nothing wrong with engaging an expert to check that you are still on track when you do hit that inflection point.”
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Ideally, you engage a wealth manager before the questions surrounding your wealth and your goals become a weight on your mind. That’s the core of long-term planning: Determining where your life’s decisions sit within your wealth journey. Wealth management professionals work best when they can build a trusted relationship with you and capture your values, motivations and objectives.
From Waller’s perspective, wealth management is often seen as delivering a service based on an ask — “it is actually creating a plan to deliver on priorities and goals aligned with your values.”
It requires a level of transparency and candour from both parties.
“Let’s say loyalty is really important to a client … alongside simplicity and curiosity,” says Waller. Now suppose that client has a relationship manager whose values are slightly different, maybe they are generosity, discipline and service. “These are three things that probably align with the values of the client but are slightly different, so as a relationship manager, it’s important to understand those similarities and differences and to make sure the client is getting what they need, so the relationship works for the long term.”
Waller and Bosman agree a wealth manager’s role should be to question and challenge goals and priorities and how they align with values, because those are the filters that every decision – from how you invest, to how you plan and protect your legacy – will move through.
Quite often a client will come in with an idea of what they want to achieve and how to get there, or a business-owning family will be so focused on their enterprise they lose sight of what they’re trying to accomplish, says Bosman. “The more you drill into it, the more you realise that, actually, they’re at odds with what they’re saying and what their values are,” she explains. “Part of our role is to unearth that, challenge it and create that slight tension to ultimately come out with a roadmap – we’re creating organisation out of chaos.”
Before engaging a wealth manager, it helps to take stock of your current financial picture. “The first thing you should do is think about your life and what stories you want to create,” she says. It could be based around family or your business – the goal is to think about your key priorities. “Start to get an idea of the levels of importance … what are the questions that I need to be asking of my potential wealth manager?”
It doesn’t have to be a deep dive, says Bosman, but before you begin conversations with a wealth management professional, establish a starting point – a balance sheet of assets and liabilities, a list of goals, your ideas surrounding your legacy or succession plan.
“If you’ve had some time to think about that, it makes it more comfortable because, for a lot of people, it’s not easy to sit in a room and talk about money,” says Bosman. “Not every client does that. But if you do, it’s amazing how quickly you can feel much more in control when you start that conversation.”
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