Wealth management is interpreted differently from bank to bank. In private banking, the term simply refers to asset management or investment consultation.
But wealth management has a much broader definition which encompasses every aspect of financial planning.
When used in this way, the term reaches further than traditional wealth or asset management to include additional services which help you grow and protect your wealth.
From a legal perspective, wealth management extends to many different kinds of contractual relationships, all of which are subject to laws and codes governing procurement and obligations.
Comprehensive financial services
Wealth management in the general sense includes the organization and coordination of wealth. Your wealth manager should first help you determine your total assets in order to coordinate the reorganization of your wealth and the cost-efficient bundling of wealth management services.
Services which may need to be coordinated or added include tax planning, retirement planning, estate planning, insurance policies, will execution services, general legal consultation, relocation and real estate services, financing solutions, fine art investments, and the establishment or management of trusts in Switzerland or abroad.
Key services like the organization and coordination of assets should be managed by your wealth manager. Other services, such as legal services, may require the assistance of third-party professionals.
Wealth management: Banks and family offices
Typically, wealth management services are only offered to high-net-worth customers with a large amount of assets. Some larger banks may be able to handle all aspects of wealth management internally through their own specialists.
Aside from banks, wealth management services are also offered by independent wealth managers, normally within the framework of multi-family offices.
Depending on your needs as a client, it can be worth contracting the services offered by banks and independent wealth managers. Getting quotes from both types of wealth managers is important.
Transparent fee structures
Wealth management services usually receive compensation in the form of a flat-rate fee or a minimum fee, and through honorary consultation fees when specialized consulting is required.
A completely transparent fee structure is a must. You will also want to ensure that no conflicts of interest exist between you and your wealth manager. If a wealth management service accepts retrocessions from third parties in the form of commissions, they must be able to provide founded reasons for doing so.
It is also important that services offered by a bank can hold their own when independently compared with similar services. As an investor you should avoid service providers who are not transparent about costs and legal issues.
Non-bankable assets, meaning illiquid assets like real estate or fine art, play an important role in wealth management. These include all assets which cannot quickly be converted into cash. Services related to real estate are regularly requested. Getting consultation regarding the buying, selling, financing and legalities (including those related to gifts or inheritances) relating to real estate can be a valuable investment.
Real estate investors should find service providers which bring extensive experience to the table and focus on real estate investments.
If you hold a significant amount of wealth, a thorough tax consultation is key to optimizing your wealth management because it affects all kinds of assets. In wealth management, tax savings can be at least as valuable as returns on your assets. Depending on the kinds of assets you hold, taxation can be an extremely complex issue, and optimizing your tax setup often requires the assistance of a tax expert.