Private wealth management is a range of services provided by credit institutions to wealthy New York families to preserve and increase their capital. In essence, this is a financial mosaic that the client puts together with his personal manager to find an individual solution.
Within the framework of private wealth management, the bank assists the client in everything – in matters of investing, managing personal funds, in obtaining legal and consulting services, as well as travel services, in creating individual insurance products. This service provides a wide range of services not only for the client but also for his/her family members.
A bit of history
The term “wealth management” was first used in retail divisions of Goldman Sachs and Morgan Stanley to differentiate services to high-net-worth clients from the mass market, but later the term has spread to the financial services market.
In the late 1980s, private banks and brokerage firms began offering workshops and events designed to showcase the expertise, capabilities and tools of sponsoring firms. Within a few years, a new business model emerged – Family Office Exchange in 1990, Institute for Private Investors in 1991 and CCC Alliance in 1995. The activities of these new entities were aimed at educating and training wealthy clients and creating a network of relationships between such clients and their families.
Wealth management training programs for high net worth private investors are offered by several leading universities. The first such program was offered at the Wharton School of Business at the University of Pennsylvania. Since 1995, 573 investors from 32 countries have been trained under this program. The five-day program is offered twice a year in collaboration with the Institute for Private Investors. The University of Chicago and Stanford University also offer five-day programs. In 2009, Columbia University offered a three-day investment course targeted at high net worth private investors.
According to a study by London-based consulting firm Scorpio, as of 2017, the largest banks in terms of managed capital were Swiss UBS ($2.1 trillion), as well as American Bank of America ($1.97 trillion) and Morgan Stanley ($1.95 trillion). The biggest leap forward was made by the Chinese bank China Merchants Bank, which moved up 5 positions in the list to 15th place in the list.
What is included in wealth management?
A private wealth manager (PWM) considers the entire investment portfolio of the client and bring it in line with the goals of the family, thereby formulating an asset allocation strategy, both in the short and long term.
Financial experts would be able to develop, implement and manage an asset management plan that covers all financial and legal aspects of a client’s life, including real estate, taxation, succession plans, and life insurance policies.
This means you can outsource day-to-day management and payroll issues to a PWM:
- Opening a bank account;
- Transfer of shares within the family;
- Submission of required legal documents on behalf of shareholders;
- Provide support in the development of pre and postnuptial agreements;
- Providing support for the drafting of wills.