A Guide to Wealth Management

Several new possibilities in the service sector have opened up because of the economy’s development in the previous decade. There is also a growth in the start-up ecosystem thanks to the significant funding by venture capitalists and private equity financiers. Outcome: A new group of comparatively young and super-affluent financers is increasing day by day.

This new group of well-to-do financers are almost pretty young and at the prime of their professional life. Because of this, they do not have the time to manage their wealth directly. These investors require complete information. The information should help them make greater investment profits. It should be big enough to meet their business services like tax structuring, estate planning, and international investing.

With its skills and abilities, the wealth management sector is equipped to handle the requirements of this section of investors. This portion will describe what wealth management is all about, how it runs, the main functions and duties of wealth managers.

Wealth Management 

It is a niche expert advisory service. It connects investment consultation with expert knowledge like accounting, taxation, estate planning, risk management, philanthropy, etc. An ideal wealth management company works as a one-stop-shop for all the requirements of busy, well-to-do individuals and families. The purpose is to improve returns from the portfolio and maximize the family’s overall economic well-being. Some of the conventional characteristics that can be observed across wealth management companies are mentioned below:


These companies are governed by several laws depending on the purpose of the service provided. It is normal to see these firms becoming licensed with SEBI as Portfolio Management Service (PMS), Registered Investment Advisor, Alternative Investment Fund (AIF), etc. These licenses support to create confidence in clients that the company complies with the relevant legal and ethical terms.

Customer is the Key

These companies work as a “fiduciary” to you. This indicates a bond of trust whereby the firm holds your interests first. The company can only suggest investment products after a thorough analysis of your risk profile and economic purposes. This is in pleasant contrast to the common trend of financial firms offering only those products that make the maximum commission.

Charges & Fees

These firms usually impose a fee for their works and given the fiduciary purpose of the service involved. The price is usually associated with the volume of investment assets you select to handle on your behalf.


Rather than a one-man army, wealth managers are usually organized as a different part in a bank or short independent boutique companies. These companies consist of skilled experts who are subject matter professionals in various areas. These companies have well-defined internal methods for onboarding and service offering of clients.

Wealth Management working process

An overall better wealth management process usually consists of the below-mentioned step by step processes:

Client signing on: You have first to sign a contractual agreement with the company. Next, the firm provides your login details to their client portal, accumulates your family’s earnings and financial investment information, and sets up an appointment for an initial meeting.

Kick-Off: The wealth managers plan an initial meeting with you and your family to know the overall financial situation, requirements, goals and aspirations, and any financial concerns and pain points. The meeting also concentrates on the more nuanced conversation on the current financial situation and investments.

Risk Profiling and Asset Allocation: The wealth managers will make your risk profile. They can do this through a simple survey or a combined AI-based tool. Based on the risk profile, the wealth manager comes to the suitable asset allocation.

Planning: The wealth advisor develops a financial plan. A plan includes insurance requirements analysis and goal-wise investment strategies. It also contains added solutions to re-align the current investment portfolio to align with suitable asset allocation. The program also has suggestions on decreasing the tax liability, succession characteristics, etc. Once the plan is set, the wealth manager fixes up a meeting with you to read the program and get a green flag on plan execution.

Plan Execution: Once you grant your green flag, the wealth manager cooperates with their back-office team. This is prepared to initiate the acquisition of investments on account of the client.

Strategy Tracking: They actively maintain your portfolio at all times. They do this by planning regular meetings to track the plan performance and assess the requirement for any field correction.

Asset Management

Suppose you have just won a lottery of say INR 50 Lacs and don’t know where to spend this fund. According to your risk profile, you look for an asset manager who spends your funds in the best avenues. This is asset management for you, clear and simple. The goal is to expand return while managing the risk to an adequate level. The asset manager can usually be a bank or even a small investment advisory company.

An ideal asset management company requires to register itself by SEBI as an “Investment Advisor”. It usually keeps explicit investment knowledge and a well-researched list of finance products. The asset manager concludes the asset allocation and risk profile. Then they choose the best investment products and fund their money in those products according to the pre-decided asset allocation.

After the investment is made, the asset manager actively follows the progress of the funds. They then make relevant changes in the investment portfolio according to the market transitions.

Wealth Management vs Asset Management

Wealth management is a complete and holistic exercise. A wealth manager estimates a family’s overall economic situation and aims and devises suitable solutions for those aims. It analyses cash management, investment suitability analysis, risk profiling, insurance, asset allocation, estate planning, tax planning, charitable giving etc.

As opposed to asset management which has boundaries and is narrow in its approach, the goal is only to make satisfactory returns while controlling the risks to a manageable level. It does not involve itself with deeper aspects like succession plans, financial goals, etc. In a way, asset management is a sub-element of wealth management. The only drawback is that the investment portfolio may not be completely regulated to the family’s financial requirements. Eventually, this can even influence the possibility of achieving the goals. 

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