Introduction to Wealth Management

Wealth Management is a preferred delivery mode for providing financial advisory services to affluent customers. It’s an extension of financial advisory service done under financial planning and involves delivery of suite of services and managing relationship with clients. It involves the team of specialists, which provide comprehensive service and also manages client relationships. All these specialists share clients. The service provider offers a complete range of planning services like risk management, investment management, retirement planning, working capital management, real estate planning, tax planning and charitable giving. Wealth management encompasses all these aspects.

Difference from Financial Planning: There is very fine line of difference between Financial Planning and Wealth Management. The difference is so subtle that many people believethat the wealth management is nothing but financial planning only. They think that financial planning is presented under new label called Wealth Management. They believe it is like putting Old Wine in New Bottle.

Financial Planning and Wealth management both focus on an individual’s financial needs and goals throughout the lifecycle. Broad areas that are taken care of by both approaches are risk management, investment management, retirement planning, working capital management, real estate planning, tax planning and charitable giving. But the differences between financial planning and wealth management are as follows:

Financial Planning	Wealth Management
Financial planning is Sole Advisor Effort	Wealth management is a Team effort
Financial planning approach assumes that the advisor is a generalist and knows all the nuances required to tackle the broad areas.	It is a team of specialists who work together and come out with overall plan for individual life.
Client who qualifies for financial planning is normally an average person who is planning to retire.	Clients who have acquired predetermined level of wealth qualifies for wealth management. Different organizations have different level and criteria to measure the level of wealth.

Wealth Management is defined as the complete blend of various asset classes, tax consultancy and risk management strategies moulded into a single cast normally targeted at High Net worth Individuals. High Net worth Individuals are the clients of private banking. The category of HNWI is not clearly defined. Generally it is thought refer to the clients with more than $1 million in financial Assets. It normally addresses certain critical issues such as asset allocation, retirement planning, estate and trust planning, business succession planning as well as equity planning.

It can be represented in a time scale as under:

Wealth Management is classified as an advanced type of financial planning that provides High net worth individuals and families with private banking, estate planning, asset management, legal resources, and investment management, with the goal of sustaining and growing long-term wealth. The usefulness of and the need for wealth management is inherent in its name. Whereas financial planning can be helpful for individuals who have accumulated wealth or are just starting to accumulate wealth, you must already have accumulated a significant amount wealth for the wealth management process to be effective.

Examples of Wealth Management include independent advisors like Insurance and mutual fund agents or large corporate entities like Citibank's Citigold and other extensions of retail banking services designed to focus on High-Net Worth retail customers. Such customers would be called internally in bank mass affluent ‘or’ upper retail clients because of their Net worth, the number of potential products they own from the bank, their Assets under management and other methods of segmentation. The banks create separate branches, services and other 'benefits' to retain or attract these customers who are typically more profitable than other retail banking customers. However, wealth management clients are not Private Banking clients because they simply do not have the

Net Worth or Assets under management to justify the level of banking services that Private Banks provide.

The gamut of product and services can be as under: