Wealth Management 101: What is it? And do I need it?

Your earliest recollection of wealth management may be balancing your checkbook with Mom on Sunday nights. Or Dad explaining why that pesky overdraft charge showed up on your debit card statement. Life was simpler then.

Now you’ve grown a career or business and have more money — and more responsibilities — to manage. With more complex financial issues, you may need a new partner to help you.

Turns out more people need “wealth management” than you might think.
  • Do you have cash or other assets that are important to protect for your business or family?
  • Do your investments equal or exceed $250-300K?
  • Do you worry about missing opportunities that could make your dollars go farther in the future?

If you answered yes to any of these questions, then you could benefit from wealth management with CSH.

Let’s talk about what wealth management is, why you may need it, and what to expect if you’re new to this level of financial planning.

What does wealth management mean anyways?

Simply put, wealth management is like financial planning, only broader. Same as financial planning, wealth management looks to develop and implement an investment strategy tailored to a client’s specific goals and assets. But it also includes estate and tax planning along with retirement planning and sometimes, legal advice.

In short, wealth management is expert guidance on all aspects of a client’s financial situation.

Wealth management is done through a partnership between you and a wealth manager. Wealth managers often work with other experts – like accountants and lawyers — to carry out the client’s comprehensive wealth management strategy.

But do I need wealth management?

One way to answer that question is to look at the size of your investment portfolio. Large wealth management firms or specialized wealth managers generally require that a client have a minimum of $1 million in investments before they’ll consider managing their wealth. But at CSH, we specialize in working with small business owners who are usually ignored by those big firms. It is important for these clients to be aware of tax issues that can affect them, and invest in such a way that they don’t make big mistakes.

If your investments are near, or exceed, $250-300K, you could benefit from wealth management at CSH.

Big mistakes can greatly impact those with wealth in the above range, so it’s very important that they work with an advisor who has a good grasp on investing without losing any of their hard-earned money.

So, what makes a good wealth manager?

First things first — look for a qualified wealth manager with the necessary credentials. Some are registered investment advisors (like I am), while others are certified financial planners (also me). The CFP is the most rigorous certification for financial planning. Registered investment advisors and CFPs are both held to fiduciary standards, which means they are legally obligated to act solely in your best interest.

This leads to the single most important question to ask about the qualifications of a wealth manager: Are you a fee-only fiduciary?

Fee-only fiduciaries are paid directly for the services they provide to clients, whereas non-fiduciary wealth managers get kickback compensation from using certain products or funds with their clients. So, for any wealth manager you’re considering, ask the very straightforward question of how they get paid.

CSH is a fee-only fiduciary, so we can always give clients a straightforward answer — we’re only working for your best interests.

A good wealth manager will work to understand your current investments and assets and your overall goals. They’ll also help manage tax issues, charitable giving, and retirement and estate planning. It’s a comprehensive set of financial services.

At your first meeting, a wealth manager might ask you questions like:

  • What is your biggest concern at this time?
  • If something happens to you unexpectedly, what will happen?

Bottom line, a good wealth manager is someone you can trust — who listens to you, understands your objectives, and offers you a high level of personal service and genuine care.

CSH wants to build your wealth management strategy.

Maybe you’ve realized that the degree of wealth you’ve accumulated could benefit from wealth management, but you’re not sure where to start. The larger firms you’ve heard of will be motivated by commissions and revenues from client interactions. We can’t really say it enough — CSH doesn’t operate that way. We are a fiduciary, which means we always act with your best interests in mind! We also have combined tax experience of nearly three decades, so this gives us an advantage over others who may offer wealth management services.

If you are an existing CSH client and have any questions or concerns about wealth management, we are always here to speak with you.

If you’re not a CSH client but want to explore what wealth management through CSH can mean for you, please give us a call at 217-824-4211. We would be more than happy to speak to you about the possibilities.