How using a wealth manager can be like having your own personal CFO

If you’re looking for someone to invest your money, any number of financial advisers will do. But if you’re a high-net-worth individual who wants someone to manage everything from investments to estate planning to insurance, a wealth management professional is better suited to meet your needs, says Michael Spector, CEO of Vista Wealth Management, an affiliate of Burr Pilger Mayer.

“Do you just want someone to invest your money for you, or do you want someone who can pull together and manage all areas of your financial life?” he says. “A wealth management professional will not only invest your money but also act as your personal CFO, building a relationship with you to guide you through every aspect of your financial health.”

Smart Business spoke with Spector about the key differences between a traditional investment adviser and a wealth manager.

Who can benefit from wealth management services?

Almost anyone can benefit from the services that a wealth management firm offers, but most firms have hard minimums and will not work with clients who have less than $1 million of liquid investable assets. Individuals and families that value professional advice and are seeking guidance on all areas of their finances, not just the investment piece, will benefit from wealth management services.

What is the difference between wealth managers and traditional investment advisers?

At Vista, we have modeled much of our service and process based on a formula created by John Bowen, founder of CEG Worldwide: Wealth management equals investment counseling plus advance planning plus relationship management. You need to have all three of those things to provide wealth management.

A majority of advisers in the investment community call themselves wealth managers, although a study by CEG found that 93 percent of those calling themselves wealth managers were really just providing traditional investment generalist services. These investment advisers typically review a client’s portfolio, make suggested changes and then follow up with quarterly performance reviews. The focus is on the investments and the relationship is mostly transactional.

With wealth management, the investments are a piece of it, but the real value comes in the advanced planning and getting the client’s financial house in order. The wealth manager helps a client deal with a variety of issues that include estate planning, insurance planning, cash flow management, retirement planning, charitable giving, college funding, special needs trusts and asset protection, providing the individual with a top-level analysis and recommendations much the way a CFO would present findings to the CEO. In both scenarios, the client is the CEO; the difference is whether or not a CFO provides guidance and does the heavy lifting for the CEO.