What is Wealth Management?

What is Wealth Management?


What is Wealth Management? – is a question I am asked surprising frequently. Even the people who don’t ask the question might be interested to read on because I think there are a number of misconceptions in people’s minds regarding the subject coupled with significant changes that have meant that the sector has developed quite significantly in recent years I hope you will find the following informative.

A Wealth Manager used to be and still is known as a Financial Adviser. Why might you seek their assistance? The sceptics I have met believe that their ‘money will be taken away from them’ or it will be lost. This is not the case. Firstly, speaking from an independent point of view, any products that are entered into are the clients own. They are their accounts, typically with online access. Some products that might be suitable are available on the internet and people can access them without the need to go through a broker (which the Wealth Manager would act as). However the products are typically the same cost or cheaper through a broker.

Let’s take a look at the text book definition of wealth management –

Wealth management refers to the provision to private individuals of financial services that have the goal of preserving and enhancing those clients’ wealth. It delivers a wide range of services that enable an individual to manage their financial affairs and assets effectively, such as;

  • Tailored banking products
  • Investment management
  • Secured lending against investment portfolios to allow them to be leveraged;
  • Investment products in areas such as foreign exchange, structured investments, property and alternative investments;
  • Trusts and estate management
  • Estate planning
  • Tax planning


It is probably worth to expand the later point – tax planning can include tax avoidance. This is perfectly legitimate and not breaking the law. Tax evasion is illegal and is breaking the law. Often the costs of creating allowable tax protective products are very cost effective when compared with the future tax savings potentially derived.

Another misconception I come across from all prospective clients is tax avoidance means avoidance of current income tax. Usually this is not the case. The remittance of income tax is likely to be the domain of an accountant or specific tax adviser. A Wealth Manager typically looks at wealth creation through choice of investments utilising clients’ net surplus and protecting those assets from undue taxes plus ensuring beneficial treatment of income tax during income draw down periods of clients’ lives

The provision of services is typically segmented. Contrary to widespread belief – products and services are not exclusively target towards high net worth individuals, especially when you are an expat. Typical categories are as follows;

  • Mass professional – makes provision for retirement income
  • Mass affluent – investable assets over $100,000 USD
  • High net worth individuals – investable assets of over $1,000,000 USD
  • Very high net worth individuals – investable assets of over $5,000,000 USD
  • Ultra-high net worth individuals – investable assets of over $30,000,000 USD

The survey, which was carried in a CNN report, showed that about a quarter of expats in China make more than $300,000 in annual salary, the highest proportion of any country.

Expat jobs that are especially in demand in China include banking and financial services, sales and marketing, human resources, advertising and communications, manufacturing and industry, health sciences and IT, according to Expat Arrivals, a website supplying destination information. Teachers are always sought after. To see the CNN article click here

There is a wide range of firms that provide wealth management services to clients. They may be referred to as wealth managers, stock brokers or private banks, each of which specialise in different segments of the market.

Private banks provide a wide range of services for their clients, including wealth management, estate planning, tax planning, insurance, lending, lines of credit, etc. Their services are normally targeted at clients with a certain minimum sum of investable cash of minimum net wealth. Private banking is offered by The deVere Group operating offshore. In this context, offshore banking means banking in a different jurisdiction your home country  – usually one with a favourable tax regime.


Each of these firms will usually undertake portfolio or investment management. Portfolio management is the management of an investment portfolio on behalf of a private client or institution with a primary focus on meeting their investment objectives. Portfolio management can be conducted on the following bases.

  • Discretionary basis – where the portfolio manager makes investment decisions within parameters laid down by the client (you!)
  • Non-discretionary or advisory basis – where the client makes all of the investment decisions, with or without seeking advice from the portfolio manager.


In both cases, the portfolio manager usually has the choice of investing directly in a range of asset classes and/or indirectly via collective investment funds.

Wealth managers increasingly use online based platforms to distribute and operate their services. These allow the adviser to view and help administer the clients’ assets. They allow the holistic viewing of various assets that a client has in a variety of accounts.

Dispelling some of the other urban myths;

It’s true that previously some people and even some companies can be seen or proven to be ‘rogues’! In particular un-regulated offshore markets may have attracted people that did not have their clients’ best interest at heart. Also independent financial advisers who were not part of a larger organisation may have steered their client into a long-term product and then disappeared in a ‘puff of smoke’

In the last ten years the financial industry as a whole has been forced to improve and tighten controls. As well as protecting the best interests of clients it has also been at the forefront of anti-money laundering and anti-terrorism legislation enforcement.