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Wealth Management Firms: How to Know When to Hire One

Financial planning is something everyone should take into consideration to achieve their money goals. Wealth management is essential to achieve their money goals and to pave the path to financial freedom. With proper financial planning, you can take control of your money situation and live the life you want.

However, not everyone is well-versed in making the best financial decisions and proper investment management. This is where wealth managers and wealth management services come in handy.

Before you search for a wealth manager, you should have an understanding of what wealth management is, to begin with. Wealth management is a holistic service offered to mid- to high-net-worth clients who intend to grow their wealth further. Through wealth management services, a financial planner manages a client's liability exposure and devises strategies for their wealth to be passed on to their rightful heirs or beneficiaries.

Wealth management at this level involves comprehensive financial planning of high-net-worth individuals instead of working with a financial advisor whose sole purpose is financial planning or investment advice.

Financial advisors can help people achieve various objectives, which vary from person to person. After all, every client has their needs and unique situations. Good financial planners can tailor their recommendations according to the client assets and needs. Here are some key client objectives wealth management can help tremendously in:

  • Setting financial goals and designing strategies for these specific goals. For some people, this may be something like having a generous amount of retirement funds to travel the world or securing enough money for their children's education and future.
  • Helping clients maximize their overall wealth. While there's nothing wrong with putting money in the bank for your retirement savings, a financial professional can grow your private wealth further. Private wealth managers can help individuals earn passive income and explore various ways to become even richer.
  • Managing their investments and finances. Wealth managers can help set up investment accounts and give advice on strategic asset allocation. In some cases, investment professionals can take over and make the decisions you need for wealth management so you can focus on other matters.
  • Setting strategies for passing their wealth. A good financial plan looks at matters in the long run. A wealth management firm can take care of estate planning for people. Estate planning is vital for people to take care of the people who matter most and ensures that people receive what they're rightfully owed.

What can wealth management services bring to the table?

A private wealth manager can offer plenty of services that can help people tremendously when it comes to their finances. Wealth management services may include the following:

  • Investment management and advice. Investment management refers to the handling of a person's financial assets and other investments. This service goes beyond buying and selling them. Management includes devising strategies for the short and long-term to acquire and disposing portfolio holdings. This service may include banking, budgeting, and tax services and duties.
  • Comprehensive financial planning. This type of service involves a thorough analysis of your individual needs, wants, and wishes today that's tailor-fit to your specific situation. This type of financial planning is about building wealth through a process, not a particular product. This is a holistic strategy for one's life. It's more than just about the money. It involves your core values and what truly matters to you. Through this service, your private wealth manager recognizes how interrelated your assets, taxes, income, and businesses are. In turn, they take a systematic, integrated approach to improving your financial situation.
  • Tax planning and accounting services. Tax planning involves weighing various tax options to determine the most beneficial strategy to conduct a business or portfolio. Tax planning involves not only helping you save on taxes but to reduce tax exposures during tax examinations. The government can be very aggressive in collecting taxes, and the right tax planning strategies help one preserve one's private wealth legally.
    Meanwhile, accounting service involves tax preparation and counseling, as well as tracking one's spending and earnings. Accounting is vital to preserving accurate financial records and implementing effective recordkeeping services.
  • Estate planning. This service involves preparing tasks that manage an individual's financial situation in the event of incapacitation or death. This planning includes the bequest of assets to an individual's chosen heirs and the settlement of their taxes and debts. It also considers other matters, such as the guardianship of minors and pets.
    Some tasks involved in this service include making a will, setting up a trust and/or making charitable donations to their institutions of choice to limit estate taxes, naming an executor and beneficiaries, and even setting up one's preferred funeral arrangements.
  • Philanthropic planning. This service is a very powerful way for individuals to be able to give to charities they believe in and care about to ensure that the organization is secured in the long run. It also involves meeting one's personal objectives in the course of getting involved in these organizations.
    Strategic philanthropic planning enables you to create a lasting family legacy and pass on values to future generations. Through this service, you will be able to help causes you genuinely believe in. At the same time, you get to benefit individually because of the eventual tax reductions through your generous donations.
  • Legal services. Wealth managers are not just well-versed in how people can make more money efficiently and effectively. They can also help individuals navigate through the legal repercussions of their investment advice. There are applicable regulatory requirements and potential commercial issues when you're involved in investment. The legal services of wealth managers enable you to navigate through possible legal problems like dispute situations and other legal scuffles.
  • Retirement planning. Retirement planning means preparing for the present for your life in the future to continue all your goals and dreams independently. This service is vital because it ensures you don't run out of money to live decently when you eventually stop working.

How much money do you need for a wealth management firm?

The services of wealth managers can help you reap excellent benefits today and in the long run. However, enlisting professional help to find low-cost index funds and smart investment decisions don't come cheap. How many investable assets should you have to justify the costs of acquiring a certified financial planner?

Well, it depends on the net worth advisor that you choose. You should generally start considering investing in a private wealth manager for money concerns when you have more than $50,000 in assets. However, many wealth managers prefer working with clients with more than $100,000 in liquid assets. At this level, the costs of portfolio managers may be worth the price as opposed to enlisting the help of regular financial advisors.

It should be noted that private wealth managers differ from typical financial advisors. A financial advisor is an individual who advises clients on a range of finance-related topics, including budgeting, tax planning, investment management, retirement savings, and the like.

Meanwhile, private wealth managers are unique financial advisors who work with high or ultra-high-net-worth individuals. The common consensus is that a person is considered high value when they have more than one million in liquid assets.

If you've been using a financial advisor for your private wealth planning and are close to reaching over a million dollars in assets, it might be best for you to enlist the services of private wealth managers instead. Why? Your financial needs and opportunities are different, and you need a wealth manager who can provide you with the best advice and services to maximize your finances.

How much money do you need for wealth management?

Everyone can benefit from investing advice, but some people tend to be hesitant to invest and explore wealth management because they think they don't have enough money needed for this endeavor. So what does it mean to be wealthy enough to invest in hedge funds and seek tax advice?

There is no right or wrong answer to this question because everyone defines wealth differently. In general, however, the common consensus is that you would need at least $1.9 million to be considered a wealthy individual. $1.1 million is needed for financial happiness, while at least $624 thousand is required for financial comfort.

However, you don't need that much money in your bank account to look at your financial picture. Some financial planners would be more than happy to help you grow your private wealth even if you have less than the amount listed above.

Should you hire wealth managers for financial planning?

A wealth manager can be a total game-changer for you to grow your wealth and make smart decisions that can impact your life today and in the future. Once you've hit financial milestones like having over a million dollars in liquid assets, it would be best if you enlist the help of experts for you to make the most of what you have. With their help, you can lead the life you've always wanted and take care of people who matter the most.

Lyons Fundamental Small Cap Value Strategy

Are you missing out on this market rally? Wall Street has seen a surge in small-cap stocks lately, with the Russell 2000 index climbing over 10.7% in the past month versus 5.5% gains in the S&P 500 and 6.1% uptick in the Nasdaq Composite. This rally coincides with cooling inflation data and hopes for Fed rate cuts in 2024.
We utilize our Fundamental Process, including our proprietary GRAPES valuation model, to screen the universe of mid, small and micro-cap companies, use the link below for more information.

Lyons Small Cap Value Fund >>

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DISCLOSURE 1 This statement applies generally to initial purchases of a position. Additional shares of a particular stock purchased at subsequent quarterly rebalances may still remain in short-term holding status (owned for less than one year) at the time of this publication. Broadridge MarketPlace is an investment manager database that serves as an objective, third-party supplier of information. Broadridge MarketPlace's Best Money Manager ranking is a comprehensive survey of institutional money manager performance. To be eligible for recognition as a Broadridge Best Money Manager, performance must be calculated on an asset size, which is at least $10 million in size for traditional US asset classes or $1 million for international and alternative investments. Classifications must fall into one of the categories that Lipper ranks (minimum of 20 contenders). All performance data must be calculated net of all fees. For additional information regarding the criteria used by Broadridge MarketPlace, see Minimum Criteria for Inclusion in Best Money Managers listed in the Disclosure of Lyons Wealth's separate Lipper ranking history document. This material is for the exclusive use of the person to whom it has been delivered, is confidential, and may not be copied, distributed, or otherwise given or disclosed to any person other than your authorized representatives. This material was prepared exclusively for information and discussion purposes and to indicate preliminarily the feasibility of a possible investment opportunity. This material is not meant to be nor shall it be construed as an attempt to define all terms and conditions of any transaction or to contain all information that is or may be material to an investor. Lyons Wealth Management, LLC is not soliciting any action based upon this material, and this material is not meant to be nor shall it be construed as an offer or solicitation of an offer for the purchase or sale of any security or advisory or other service. Lyons Wealth Management ("LWM") began formally tracking its portfolio performance as of April 2nd, 2012. Portfolio composite returns are preliminary and are presented on a time-weighted, size-weighted total return basis using monthly portfolio valuations. The composite returns for each LWM portfolio presented herein include all eligible LWM accounts. To be eligible for inclusion in the LWM composite, an account must be fee paying, fully discretionary, and not part of a broker wrap program. New portfolios that are managed to the Tactical Allocation Portfolio investment strategy and meet the composite definition will be added to the composite when fully invested. The composite is not representative of all accounts managed by LWM. All returns are expressed in U.S. Dollars and are presented net of all fees and expenses. The returns reflect the reinvestment of all dividends and interest. The return information presented herein has not been audited or otherwise verified by an independent accounting firm, and past performance of any LWM portfolio does not guarantee future results. No current or prospective client should assume future performance of any specific investment strategy will be profitable or equal to past performance levels. All investment strategies have the potential for profit or loss. Changes in investment strategies, contributions or withdrawals may cause the performance results of your portfolio to differ materially from the reported composite performance. Different types of investments involve varying degrees of risk, and there can be no assurance that any specific investment will either be suitable or profitable for a client's investment portfolio. Historical performance results for market indices and/or categories, generally do not reflect the deduction of transaction and/or custodial charges or the deduction of an investment-management fee, the incurrence of which would have the effect of decreasing historical performance results. Economic factors, market conditions, and investment strategies will affect the performance of any portfolio and there are no assurances that it will match or outperform any particular benchmark. The information, data, analyses and opinions contained herein (1) may include the confidential and proprietary information of data provider, (2) may include, or be derived from information which cannot be verified by data provider, (3) may not be copied or redistributed,(4) do not constitute investment advice offered by data provider, (5) are provided solely for informational purposes and therefore are not an offer to buy or sell a security, and (6) are not warranted to be correct, complete or accurate. Except as otherwise required by law, data provider shall not be responsible for any trading decisions, damages or other losses resulting from, or related to, this information, data, analyses or opinions or their use. This report is supplemental sales literature.