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We will discuss wealth management strategies for both new and seasoned investors, including how investing works and the basics of managing money. We will also discuss the various terminology for what a wealth manager is.
Wealth managers can also be known as “financial planner”, “wealth advisor”, financial advisor” and “wealth manager.”
Achieving Wealth Management Strategies
Navigating the world of investment and finance grows more complicated and difficult each year. Learning how to manage taxes, create wealth, manage investments and estate planning can be a daunting task.
It’s much simpler and easier to depend on the expertise of a wealth advisor to accomplish financial goals. Contacting a professional wealth advisor simplify wealth management strategies for you. More on that later.
Investment Types
There are a number of different types of investments that are available for investors to choose from. Moreover, technology of the 21st century has made it easier than ever to choose many different investment options.
For example, global wealth management investments can include things like stocks, bonds and real estate. In addition, there are many new investment opportunities like cryptocurrency and micro investing.
Types of Investments for Global Wealth Management:
- Stocks
- Bonds
- Mutual Funds
- Retirement
- Real Estate Trusts (REITs)
- Real Estate (Land/Homes)
- Annuities
- Precious Metals (Gold, Silver, etc.)
- Cryptocurrency (Bitcoin)
- Insurance
- Stocks
- Bonds
- Mutual Funds
- Retirement
- Real Estate Trusts (REITs)
- Real Estate (Land/Homes)
- Annuities
- Precious Metals (Gold, Silver, etc.)
- Cryptocurrency (Bitcoin)
- Insurance
Investing 101
Take Control of Personal Finances and Dollar-Cost Averaging
Learning about investing doesn’t have to be complicated. Once you establish your goals and how much money that you want to invest each month, you can then determine what kind of investments you wish to make.
However, every adult should learn to budget, save money and pay off debt first. If you have a family, it is critical that you begin planning your financial future.
Many investors use “dollar-cost averaging” as a part of their investment strategy. Dollar-cost averaging is simply dividing up the amount of money you have to invest over a longer time frame.
This investment methodology means that you invest the same amount of money each week or month, no matter if the market goes higher or lower. Dollar-cost averaging takes the emotion out of buying stocks.
Learn more about investing in our article, Financial Planning Process ( https://piggybankcoins.com/financial-planning-process/).
What is Your Level of Risk?
Active Versus Passive Investing; Aggressive Versus Conservative Investing
First, the major categories of investment include active management or passive management.
For example, a portfolio manager can determine what investments are in your fund and make decision for you using passive management; however, active management means that you reserve more control of your investments and perhaps you even use online services to trade individual…
…stocks on a daily basis.
Second, you must determine if you are an aggressive or a conservative investor. Aggressive investing is utilized by those who want to take more risk and capture greater returns.
This type of investing is considered acceptable for younger investors and for savvy investors who want to dedicate a small portion of their portfolio to higher risk. Conservative investing is a lower risk style of investing.
Returns tend to be lower than the aggressive style, but come with lower risk. This style is best for those that desire lower risk and those who are getting closer to retirement age.
Diversify Investments
One important tool in your wealth management strategies tool box is to diversify. No one can predict the future to know what investments will do well and which ones will fail. As a result, we can improve our odds of success in investing my diversifying our investments.
Diversification of investments means spreading your money over different investment sectors. For example, you may want to have some stocks, bonds, real estate and precious metals in your investment portfolio.
Tax Considerations
Another consideration for wealth management strategies is how tax is managed. Some investments will inherently have higher tax implications than others. In many cases, timing is important when the asset is sold in determining how it is taxed.
The level of taxation of an asset can impact your return on investment. For example, if you purchase a home, fix it up and flip it for a profit, it will be taxed at a higher rate than if you simply bought a home and lived in in for a few years.
What is a Wealth Advisor?
A Wealth Advisor Assists Clients with Managing Investments and Assets
In general, a wealth advisor can be a financial planner or a financial advisor. A wealth advisor may be an expert in the field of finance, with professional certifications and degrees. In contrast, a wealth advisor may also be less experienced.
Both can assist clients with the goal of wealth management strategies.
A wealth advisor can assist individuals, businesses and families with implementation and management of strategies for wealth management strategies.
In many cases, they focus on helping high-net worth clients with things like establishing goals and values, creating a legacy and wise investments.
Some of the topics that a wealth advisor can advise you on include:
Some of the topics that a wealth advisor can advise you on include:
- Investment Strategy
- Short and Long-term Investment Planning
- Debt Management
- Saving and Budgeting
- Estate Planning
- Retirement Planning
- Insurance
- Wealth advisors
- Wealth management strategies
- Tax Management
- Short and Long-term Investment Planning
- Debt Management
- Saving and Budgeting
- Estate Planning
- Retirement Planning
- Insurance
- Wealth advisors
- Wealth management strategies
- Tax Management
Wealth Manager
A subsection of a wealth advisor group, a wealth manager provides assistance to high net worth clients. Moreover, the name is frequently synonymous with wealth advisor or financial advisor.
In many cases, a wealth manager offers the same services to clients as a wealth advisor does. However, a wealth manager focuses on wealth management strategies for clients.
Typically, a wealth manager deals with high net worth individuals and families. The discipline combines several personal finance areas into one group.
In addition, the intent of a wealth manager is to grow and preserve individual and family wealth over long periods or generations.
Financial Planner
A Loose Group of Financial Professionals Who Represent Different Industries
““A financial planner is a qualified investment professional who helps individuals and corporations meet their long-term financial objectives.
Financial Planners do their work by consulting with clients to analyze their goals, risk tolerance ( https://www.investopedia.com/terms/r/risktolerance.asp), life or corporate stages and identify a suitable class of investments for them.” –Investopedia ( https://www.investopedia.com/terms/f/financialplanner.asp)” –
In short, a financial planner is a loose group of individuals from different finance industries, like banking, insurance and tax. They help individuals create a plan for long- and short-term goals.
Moreover, financial planners come from different backgrounds and may not have financial expertise like financial advisors or wealth advisors.
Certified Financial Planners (CFP) must study and understand industry accounting and investing principles. Frequently, a CFP must be familiar with software tools and technology related to financial planning.
They can be valuable with helping clients with wealth management strategies.
Financial Advisor
True Financial Advisors Are Certified Professionals Who Act as Fiduciaries to Clients, Unlike Salesmen
The term financial advisor is one of the broadest terms when describing professionals who give advice regarding money management.
They are also sometimes called “investment advisors.” In many cases, the term “financial advisor” is a substitute term for “wealth advisor”, “wealth manager” and “financial planner.” However, there is a difference between the terms.
Board Examination and Testing for Financial Professionals
A financial advisor is considered a true professional in the financial industry. For example, they may be required to pass board exams and have a financial education from an accredited institution of higher learning or university degree.
Finally, if the advisor is working with the public at large, they are required to hold a Series 65 license.
The Series 65 license is administered by the Financial Industry Regulatory Authority (FINRA). In order to pass the Series 65 exam, you must gain expertise in topics such as state and federal securities laws and finance rules.
In addition, financial advisors must learn about fiduciary obligations and ethical standards relating to clients. Fiduciary responsibility is important to many clients who seek wealth management strategies.
Another license that some financial advisors acquire is Series 7 Certification. Candidates must past the Series 7 exam to qualify for the certification to work with clients in the financial industry.
““A candidate who passes the Series 7 exam is qualified for the solicitation, purchase and/or sale of all securities products, including corporate securities, municipal fund securities, options, direct participation programs, investment company products and variable contracts.”…
…–FINRA ( https://www.finra.org/registration-exams-ce/qualification-exams/series7) Website” –
Caveat Regarding Advisors and Planners
Beware of Professionals Who Receive Sales Commissions – You Get What You Pay For
One of the ways in which these professional advisors differentiate themselves is how they receive compensation.
Some professionals charge an hourly rate for their time or as a fee in the form of a percentage of the account size; whereas, others may receive payment through sales commissions or financial incentives.
Note that commissions or incentives may create conflict with what is in the best interest clients. For example, if your financial planner receives sales commissions on buying/selling stock in your account, he/she may be inclined to more frequently trade stocks in the account.
As a result, frequent trading benefits the professional through sales commissions; however, you may be the loser in the end as portfolio performance takes a back seat to trading.
Wealth Management Strategies Wrap Up
As you can see, there are several differences among the financial professionals and some of the other terminology used in their industry. Many of these professionals assist people with wealth management strategies, however there are some differences.
Hopefully, this understanding helps you navigate the financial advisement world better.
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Disclaimer: It is important to note that Piggy Bank Coins does not provide financial advice. We do not endorse or recommend any financial investments. Instead, we provide information for educational purposes to those seeking knowledge regarding personal finance.
However, in the spirit of transparency, note that the author is an investor in cryptocurrencies, precious metals and some equities.
In addition, The Federal Trade Commission (FTC) requires that Piggy Bank Coins disclose to readers that we may receive commissions when you click our links and make purchases. However, this does not impact our reviews and comparisons.
Moreover, we try our best to keep things fair and balanced, to help you make the best choice for you.
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