Wealth Management Industry Overview

What is the Wealth Management Industry and who are their clients?

The wealth management industry makes use of conventional investment assets and instruments such as: equities, bonds, foreign exchange, funds, derivatives, alternative investments such as private equity, precious metals, real estate and also, credit and lending products. 

These assets are held in particular investment vehicles that provide an efficient mechanism for the management of client investments by allowing consideration of the clients’ personal circumstances, including their taxation position, and their overall investment goals in consideration of their risk tolerance.

There are no industry-wide financial segmentation criteria for clients; nevertheless, some market participants describe high net worth clients as having a minimum of $2 million in investable money, while others define it as much greater. Similarly, the threshold for Ultra High Net Individuals is frequently set at $20 million, although it can be as high as $100 million.

As well as the needs of HNWIs and UHNWIs, the Wealth Management industry also covers affluent clients, those with wealth typically below 2 million dollars, and core affluent, those with assets typically below 1 million dollars.

Who are the main global and local players in the Industry?

• Geographical Profile - Despite majority of the wealth still within North American and Western European markets, Asia and other Emerging Markets have seen a significant increase.
• Market Participants - It is made up of large global universal banks that individually manage trillions of dollars like Swiss banks UBS and Credit Suisse, as well as US banks such as Morgan Stanley, Bank of America and JP Morgan.
• Wealth Management Centres - Major centres for the provision of wealth management include Switzerland, the United Kingdom and the United States. 

What are the key roles within the Wealth Management Industry?

• Relationship Manager - Relationship Managers or Client Advisers are the primary contact point between the client and the Wealth Management firm. They have overall responsibility for managing the client relationship. They are usually required to be professionally qualified and hold relevant regulatory certifications before advising clients. In larger firms or with more complex clients they may also be responsible for providing investment advice.
  
  
• Investment Adviser - The Investment Advisers role is to provide personalised recommendations to clients regarding an investor's portfolio. The key requirement is that the advice is bespoke to the client and considers their unique financial situation. This investment view is usually compiled by the firm's Chief Investment Officer (CIO).
  
  
• Financial Planner - The role of a Financial Planner is to establish the clients goals over the short, medium and long term. The planner then performs an evaluation of an individual's current financial position in comparison to goals. This allows for the development of a plan to achieve financial goals  for the client.
  
  
• Credit/ Mortgage Adviser - Some of the uses of Credit Advisers are quite different from those served by Wealth Managers. Although clients are very asset wealthy they may still have short term liquidity needs for example overdrafts, bridging loans and other lending needs. Some clients also want to achieve some of their investment objectives by using structured credit facilities.