Defining and understanding wealth management.How would you define "wealth management?" If you were to ask 100 investors what wealth management means to them, you would probably get a wide variety of responses. That's because wealth--and "wealth management" means different things to different people and the "right" answer is as unique as you are. Wealth management requires a disciplined process, customized solutions, and, perhaps most important, personalized per·son·al·ize tr.v. per·son·al·ized, per·son·al·iz·ing, per·son·al·iz·es 1. To take (a general remark or characterization) in a personal manner. 2. To attribute human or personal qualities to; personify. attention. To get the personalized attention you need, you should choose a financial advisor who can work with you to help you pursue your financial goals. Choosing a financial advisor To begin your search for a financial advisor, ask friends, family, colleagues, or your lawyer or accountant for referrals. Or, introduce yourself to the manager of a local brokerage firm and ask him or her to recommend one or two financial advisors for you to interview. When choosing a financial advisor, look for someone who can make a commitment to: * take the time to learn about your individual goals and needs so that you will feel confident in the investment decisions you make, and * understand that the best investment decisions are the ones that are suitable for each individual client. Today's investors need more than information. It takes the advice of an investment professional to put that information into context; to know you, your needs and your stage of life; to determine which strategies complement your goals and help assure that your financial plan is suitable for you now and for years to come. A personalized asset allocation Asset Allocation The process of dividing a portfolio among major asset categories such as bonds, stocks or cash. The purpose of asset allocation is to reduce risk by diversifying the portfolio. strategy Asset allocation is the distribution of assets among a variety of different asset categories such as stocks, bonds, and cash equivalent instruments. At the foundation of a comprehensive wealth management approach is an asset allocation strategy. The principle of asset allocation offers investors several potential advantages: Reducing emotional response to market volatility, allowing you to stay invested over the long term. Helping to minimize overall portfolio risk for a given level of return. Seeking to provide more consistent long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. performance that can improve the likelihood of achieving a desired investment goal over time. Encouraging a long-term investment perspective. Based on your risk tolerance Risk Tolerance The degree of uncertainty that an investor can handle in regards to a negative change in the value of their portfolio. Notes: An investor's risk tolerance varies according to age, income requirements, financial goals, etc. , time horizon, and investment needs and goals, your financial advisor should help you identify a long-term target asset allocation mix among equities, bonds, and cash equivalent instruments that is customized for you. In addition, the appropriate integration of professionally managed investments, alternative investments for suitable investors, and other products and services that may be appropriate should be considered. Total wealth management Once your financial advisor understands your goals and recommends a customized asset allocation strategy for you, he can help you tailor A tailor is a person whose occupation is to sew menswear style jackets and the skirts or trousers that go with them. Although the term dates to the thirteenth century, tailor an investment plan to pursue all or any one of the three primary components of wealth management: accumulation, preservation and transfer. Wealth accumulation The accumulation phase is the foundation upon which you will fund your long-term needs. This stage typically is the chief concern of younger investors, those in their thirties, forties and fifties. Three key accumulation scenarios shared by many investors are saving for retirement, sending children or grandchildren GRANDCHILDREN, domestic relations. The children of one's children. Sometimes these may claim bequests given in a will to children, though in general they can make no such claim. 6 Co. 16. to college and buying a home. Wealth preservation As your wealth and income increase, your concern may shift to finding a balance between asset growth and preserving what you've accumulated ac·cu·mu·late v. ac·cu·mu·lat·ed, ac·cu·mu·lat·ing, ac·cu·mu·lates v.tr. To gather or pile up; amass. See Synonyms at gather. v.intr. To mount up; increase. . At this stage in your life, you may be thinking more seriously about retirement. Wealth preservation also applies to your day-today financial life. This includes managing your cash flow and the impact of taxes on your portfolio, as well as overall risk management. Your financial advisor can work with you to develop a long-term investment strategy that is designed to help you preserve your wealth. Wealth transfer One of the most important wealth management needs is transferring what you have accumulated and preserved throughout your lifetime to your family, loved ones loved ones npl → seres mpl queridos loved ones npl → proches mpl et amis chers loved ones love npl and charities. This usually involves creating an estate planning Estate Planning The overall planning of a person's wealth, including the preparation of a will and the planning of taxes after the individual's death. Notes: Contrary to popular belief, estate planning involves much more than preparing a will, and it is not only for the strategy that may involve the use of wills and trusts, and possibly a family gifting or charitable giving program. An assessment of life insurance needs and uses is frequently involved as well. While many investors may not consider themselves "wealthy," wealth is not simply money, stocks, bonds or other assets other assets Assets of relatively small value. For financial reporting purposes, firms frequently combine small assets into a single category rather than listing each item separately. . It's what you work for, it's what you inherit To receive property according to the state laws of intestate succession from a decedent who has failed to execute a valid will, or, where the term is applied in a more general sense, to receive the property of a decedent by will. inherit v. and it's what you want to pass on to your children, your grandchildren or your favorite charity. Check with your financial advisor and see how wealth management strategies can help you pursue your goals. James E. Riding is a Financial Advisor with UBS UBS Union Bank of Switzerland UBS United Bible Societies UBS United Blood Services UBS United Buying Service UBS Used Bookstore UBS University Business Services UBS Universal Building Society (UK) UBS Ulaanbaatar Broadcasting System Financial Services The examples and perspective in this article or section may not represent a worldwide view of the subject. Please [ improve this article] or discuss the issue on the talk page. Inc. in Woodland Hills. For more information, please call (818) 594-4335 direct or e-mail james.riding@ubs.com |
|
||||||||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion