- Wealth
- Wealth Management
Having wealth means you need to learn the language of financial advisors. Read up on private banking, establishing a family office and other ways to get the job done.
Wealth Management
Frequently Asked Questions
What are the best investments for young people?
Young adults should begin to build a well-diversified portfolio of the major asset classes that include mutual funds or exchange traded funds (ETFs) that cover major indices of domestic and foreign stocks and fixed income securities. The portfolio should be rebalanced on a recurring periodic basis so that it continues to align with investor’s risk tolerance and investment style.
Learn MoreThe Best Investments for Young Adults
What is a fiduciary standard?
A fiduciary standard is a legal and ethical requirement on the part of registered investment advisors to put the financial interests of their clients above their own. This means that financial advisors can not sell or otherwise steer client investments toward commissioned-based investments that might be in their own financial interests unless they can prove they would be of primary benefit to the client.
Learn MoreSuitability vs. Fiduciary Standards: What's the Difference?
What problems do people encounter with financial advisors?
Some common complaints expressed by investors concerning their financial advisors include that they only promote investment products that benefit themselves through high commissions, promising unrealistic investment returns, not providing enough information about what they sell and not being responsive to client inquiries. As more financial advisors adhere to fiduciary standards these types of complaints should become less common, however.
Learn MoreTop 6 Complaints About Financial Advisors
What’s the difference between wealth management and private banking?
Wealth management generally refers to financial advisory and investment management services for high net worth individuals. Private banking is offered by commercial banking institutions and also offers investment advisory and management services that also includes dedicated banking and trust management services tailored to high net worth individuals.
Learn MorePrivate Banking vs. Wealth Management: What's the Difference?
What’s the best way to manage wealth during a recession?
Managing wealth during economic downturns generally entails strategies to preserve capital through shifting investments toward fixed income and other asset classes that tend to be negatively correlated with equities. Within equity investments certain sectors of the economy also tend to outperform others such as utilities, industrial goods and defense stocks. Wealth management services can be particularly valuable during recessionary periods as their down-market strategies are often more sophisticated than self-directed individual investors can plan and execute.
Learn More7 Ways to Recession-Proof Your Life
Key Terms
Family Offices
Family offices provide wealth management services to ultra high net worth individuals or familys or groups of affluent families that include bespoke portfolio management, insurance, trust, estate planning and tax services. Family offices can also manage charitable giving, establishing foundations, and wealth transfer services as well as provide concierge services for travel, aircraft and yacht management and personal security.
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Non-Accredited Investor
A non-accredited investor is an individual that does not meet the Securities and Exchange Commission (SEC) definition of an accredited investor, which means they have less than $200,000 in annual income ($300,000 for household) and less than $1 million in investable assets excluding their primary residence. Non-accredited investors are also not considered to have the requisite financial knowledge to look after their investment activities without the assistance of the SEC.
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Goal-Based Investing
Goal-based investing seeks to achieve client-defined life goals rather than maximizing overall investment return relative to the market as a benchmark. Goals such as funding a child’s college education, being able to afford to retire at a certain age or within a fixed range of time or to achieve a specific dollar amount of charitable gift are examples of goal-based investing.
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Private Banking
Private banking refers to personalized banking services such as enhanced savings and checking, trust and wealth management services offered to high net worth individuals through a commercial retail bank or financial services company. Private banking seeks to provide all the comprehensive financial services required by affluent individuals or families that can also include estate planning, insurance and tax services.
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Idle Funds
Idle funds refers to cash, usually in an investment or a non-interest bearing checking or savings account, or that is not otherwise invested in equities or fixed income. Idle funds are therefore not experiencing market returns or experiencing growth and subject to loss from the effects of inflation.
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Wealth Management
Wealth management refers to a suite of financial and investment advisory services offered by private financial services organizations, family offices or financial institutions to address the complex financial needs of high net worth individuals. Wealth management can also involve personalized strategies for insurance, income taxes, estate planning and charitable giving.
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