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What Does a Wealth Manager Do and Should You Hire One?

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A good financial advisor can help you achieve your monetary goals, while a good wealth manager can help turn your pile of money into an even bigger pile. It’s best to choose an advisor who specializes in the type of planning you need. If you’ve accumulated a significant amount of assets, consider working with a wealth manager.

Read on to learn more about wealth managers and how they work.

What Does a Wealth Manager Do?

A wealth manager specializes in working with high-net-worth clients. While wealth managers often manage their clients’ investments, that’s typically just one part of what they do.

Many wealth managers take a holistic approach to financial planning. They get to know you and your goals, which might include paying for your kids’ college education, planning for retirement or buying a second home. They look at your current financial situation and help you develop a strategy for achieving your fiscal goals and increasing your wealth.

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Wealth Managers vs. Financial Planners

A wealth manager tends to take a hands-on approach with clients, whether it involves providing ongoing financial advice and management or meeting with a client’s attorneys and accountants. Wealth managers also put a big focus on building and maintaining wealth. A financial planner will typically work with a wider range of clients, but won’t meet with them as often as a wealth manager. Financial planners provide advice, but the client is expected to put that advice into action.

You might meet with a wealth manager several times a year to review how you’re progressing toward your goals, whether it’s keeping your stock portfolio well balanced or looking for new business opportunities. With financial planners, you might have an initial meeting and a couple of follow-up meetings to talk about reducing debt or building an emergency fund.

When Should You Get a Wealth Manager?

You should get a wealth manager when you have a high net worth and need one or more of the services wealth managers provide. These services typically include the following:

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Is It Worth Paying a Wealth Manager?

You might find the cost of a wealth manager worthwhile if you prefer complete financial management rather than a piecemeal approach. It might also be beneficial to work with one person who has an in-depth understanding of your financial and personal goals, and who is knowledgeable about the needs of high-net-worth individuals.

Wealth Manager Fee Structures

Different wealth managers have different fee structures. Some charge an hourly fee, some charge an annual fee, some charge a percentage of the assets they’re managing, and some charge a combination of all three.

Wealth managers who charge a percentage of assets under management often use a tiered structure for fees. For example, you might pay 1% for the first $1 million under management, then 0.75% for the next million and 0.50% for anything above $2 million. If you had $3 million in assets under management with this fee structure, you would pay $10,000 in fees for the first million, $7,500 for the next million and $5,000 for the third million, for a total of $22,500 per year in fees.

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How To Find a Wealth Manager

Choosing a wealth manager requires research and due diligence. It’s best to speak with at least two or three before making a final decision. Here are some considerations:

You can also review lists of highly-rated wealth management firms to find a qualified advisor.