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How wealth managers work

Private wealth management services are offered by many financial institutions, including investment brokerages and big banks. When these services are offered within institutions, they’re often set up as small groups under a lead manager so they can provide more personalized service to their clients. There are also numerous independent wealth advisers and portfolio managers that follow that same model.

A private wealth manager’s job is to ensure that your short-, mid- and long-term goals don’t clash. Selling off some of your stocks, bonds or ETFs might seem like an easy way to free up some liquidity, for example. But it might also damage the overall health of your portfolio, which at its most basic is intended to pay for your family’s broad financial needs and to ensure you can retire comfortably.

Think of it this way: Inexperienced investors, or those who are simply too busy making money to manage it, might not understand the implications of their decisions and end up tying their various financial interests into a knot. It’s a private wealth manager’s job to untie that knot and braid the family’s different interests together in a way that strengthens the whole.

No reputable private wealth manager will offer investors a one-size-fits-all solution. Instead, they provide personalized insights into the many investment vehicles available on the market — real estate, bonds, stocks, and the myriad forms each one takes. And, they’ll address the tax implications of each and how they can support or limit growth of your finances over time.

Private wealth managers don’t come cheap. Most charge clients a fee based on a percentage of the value of the assets placed under their management. While a few still operate on commissions paid by the funds they place on a client’s behalf, this is changing due to investor concerns that a manager might recommend a fund or other financial product because of the commission that’s attached to it.

Most private wealth managers also create affiliate arrangements with family law, estate planning and business succession lawyers, as well as accountants, tax experts and insurance providers. This helps them ensure each client has access to the expertise needed to ensure they’re able to balance financial decisions for both their own generation and generations yet to come.

That’s important, because a robust financial plan contains multiple components — estate planning, retirement planning, asset management, tax planning — each of which has its own set of miniscule moving parts. It’s easy for an overwhelmed investor to think they’d need an octopus’s eight arms and nine brains to make sense of it all. A private wealth manager is that octopus.


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Clayton Jarvis is a mortgage reporter at MoneyWise. Prior to joining the MoneyWise team, Clay wrote for and edited a variety of real estate publications, including Canadian Real Estate Wealth, Real Estate Professional, Mortgage Broker News, Canadian Mortgage Professional, and Mortgage Professional America.


The content provided on Moneywise is information to help users become financially literate. It is neither tax nor legal advice, is not intended to be relied upon as a forecast, research or investment advice, and is not a recommendation, offer or solicitation to buy or sell any securities or to adopt any investment strategy. Tax, investment and all other decisions should be made, as appropriate, only with guidance from a qualified professional. We make no representation or warranty of any kind, either express or implied, with respect to the data provided, the timeliness thereof, the results to be obtained by the use thereof or any other matter.