FIVE SIGNS YOU NEED A WEALTH MANAGER – AND IT WILL BE WELL BEFORE £10M

The term “millionaire” still has an aspirational shine, but according to a new study* you’d now need ten times this amount to be generally considered wealthy. But while “wealthy” may start at £10m, most will need a wealth manager well before this point, experts warn. In fact, achieving your financial goals may depend on it.

Lee Goggin, co-founder of findaWEALTHMANAGER.com, says:

“Conceptions of wealth vary hugely and the point at which you start to feel wealthy is a very personal thing. Many people aim to get to a certain level by a certain age, although others have more complex criteria for having ‘arrived’. The irony is that even those with some way to go on their wealth journey are probably already in real need of a wealth manager.

“Since launching findaWEALTHMANAGER.com back in 2012, we’ve been consistently surprised by the number of users who have significant assets yet don’t have a wealth manager in place. Often it’s a case of them not really knowing which providers are out there, but a startlingly high proportion wrongly believe that wealth management isn’t for them, that they’re not quite there yet – this despite the fact that they may already meet the criteria for many of the providers on our panel.**

“A second, even bigger, irony is that proper investment and tax planning advice will greatly accelerate your arrival at whatever level of ‘wealthy’ you are aiming for.”

Five signs you need a wealth manager 

1. You are approaching the pension contribution limit (or built a significant pot young)

The reduction in the lifetime pension contribution allowance to £1.25m from £1.5m poses a real issue for many affluent individuals. A £1.25m pension pot may seem like an awful lot, but many savers could be sleepwalking into exceeding this limit. Recent figures from one advisory firm suggest that a pension pot of £72,000 could compound to breach the limit in 30 years – even if no more contributions are made. This means that those who have managed to build up a significant sum of money by their thirties might have to be looking at other savings routes already. ISAs are increasingly popular way for people to continue to build their pension pots, but there are lots of other alternatives a wealth manager can take you through.

2. Your tax bill is starting to really hurt

Tax planning is an essential part of building and then preserving your wealth – be this income, capital gains or inheritance tax. Everyone knows about the tax advantages of ISAs and pensions, but there are lots of other strategies a wealth manager can deploy to minimise your tax obligations in a perfectly legitimate manner. In fact, the government offers compelling tax incentives on certain types of investment – like Enterprise Investment Schemes and Venture Capital Trusts – which can really get your tax bill down.

3. Keeping track of all your investments has become an issue

Some say a serviceable portfolio can be constructed from as few as 15 stocks, but many people’s investments will be far more complex. Just keeping track of all your investments can be real chore, and that’s without managing them to ensure proper diversification and risk management. A wealth manager will give you a comprehensive overview of all your investments and how they are performing. They can then take over managing your investments – in line with your objectives and risk profile, and with the backing of extensive research capabilities.

4. You’re missing out on investment opportunities (and the best returns)

Your friend is telling you about the stellar returns their latest investment delivered, but you didn’t know anything about this opportunity – not a nice feeling. While people tend to exhibit a home bias in their investment behaviour, you will probably have to look further afield to properly diversify your investments and maximise your returns. Also, although stocks and bonds are where most people feel most comfortable, alternative asset classes like hedge funds, private equity, commodities and real estate could be all be appropriate (depending on your objectives, time horizons and risk profile). A good wealth manager will help you leverage the entire investment universe to maximise your wealth.

5. You need someone who really understands your financial situation and goals

Busy professionals, senior executives and business owners can all fall into the “time rich, cash poor” category, and even those who are simply diligent savers will be leading busy lives. Having an adviser on hand who knows your financial situation and goals intimately – and who has taken the time to really understand your risk profile – can be invaluable. No one likes having to “tell their story” repeatedly, or getting bounced around call centres for that matter. Most wealth managers will appoint a dedicated relationship manager who can stay with you over the years, with their advice becoming more tailored and valuable as time goes on.

*Oracle Capital Group found that 55% of survey participants think £10m in assets constitutes “wealthy”; for 20% the figure was £100m.

**findaWEALTHMANAGER.com specialises in matching clients with at least £150,000 in liquid assets with wealth managers. However it has also identified providers who will work with those with as little as £25,000 to invest.

About findaWEALTHMANAGER.com

findaWEALTHMANAGER.com is the only independent, free online matching service that helps people find the wealth manager best suited to them.

The process involves completing a short online questionnaire, which impartially identifies a shortlist of up to three best-matched wealth managers. findaWEALTHMANAGER.com takes the guesswork out of choosing the firm with the capabilities, service levels, approach and geographical location that offers a client the best match.

findaWEALTHMANAGER.com’s panel of wealth managers covers the entire spectrum of institutions – large and small, traditional and more recently established, independent and bank-owned.