What exactly does a Wealth Manager do?

Wealth in the modern sense is not restricted to monetary assets or real estate holdings or any other assets but includes digital assets, digital money or cryptocurrencies as well.

Wealth managers are financial and investment advisers for typically affluent individuals. The goal of wealth managers is to monitor, invest and grow the wealth of these individuals.

Wealth management encompasses investment advice, real estate planning, succession planning, tax advice, retirement planning, insurance, and financial planning.

The goal of wealth management is to achieve financial goals and grow and secure the wealth of these affluent clients. 

Though used synonymously, there is a distinction between financial management, wealth management and asset management.

All these financial professionals are certified and licensed professionals providing a comprehensive range of services with a specialized skill set.

A wealth manager works with a financial planner, asset manager, lawyers, accountants, and bankers to collect, monitor, and measure the data regarding the wealth of an individual. Based on this information the professional or a team of professionals work on deciding the growth and financial security strategy.

The recent norms suggest that a person may be considered as an HNI if the individual has an investable surplus of more than Rs. 5 crores.

In such cases, the HNI may choose to seek professional help to manage the wealth in the form of a wealth manager.

Wealth management services are – 

  • Investment advisory – The firm or a team of experts assist the client to develop an investment strategy as per the financial goals and risk tolerance. 
  • Financial planning – This refers to the planning and monitoring of the budgets, cash flows, income, and expenses of the client. 
  • Tax planning – A team of accountants plan for and advise clients on tax-related matters and guide them on minimizing their tax liability.
  • Legal and Estate/Legacy planning – This includes planning for the division of the assets after the death of the client, creating a will, and assisting in deciding the beneficiaries.
  • Retirement planning – The firms also assist in planning for the retirement of the individual and managing the income sources post-retirement.

Skills required to become a wealth manager are – 

These professionals require technical and non-technical or interpersonal skills. 

  1. To enter the field of wealth management and financial planning a person requires a Master’s degree in Finance or a doctoral degree.
  2. The professional may require to develop a niche skill set such as certification in financial planning, financial analysis, accountancy or certification in private wealth management.
  3. The person needs to be updated about the financial market trends, conduct a risk analysis, understand the legal structure, have knowledge of the tax structure and have knowledge of accounting.
  4. Apart from technical skills, one must possess interpersonal skills of effective communication, networking and sales skills.
  5. In addition to it, the professional must possess certain basic IT skills.

The advisory firms charge the clients on an hourly basis or a percentage share of the value of their assets. According to job listing portals, the average annual salary of a wealth manager is Rs. 7 LPA. 

Due to the changing economic, geographical and monetary policies, the number of HNIs and UHNIs is increasing and India is said to be the 3rd largest economy by 2030. Hence the need for wealth management companies is growing and holds immense opportunities for those interested in the world of finance.

MIT School of Distance Education (MITSDE) is an institute that understands the growing need for finance professionals in the market and hence offers PG Diploma in Finance Management (PGDM Finance).

The course covers the basics of finance, brand valuation, intangible assets, value drivers, financial modelling, and financial analytics.