Wealth management

Find out about wealth management services and how to make sure you get the service you expect.

Wealth management is a financial service provided to customers who have signed an agreement with a firm to have their money or investments managed.

This is done on either a discretionary or advisory basis.

  • A discretionary service is where the firm manages your portfolio of investments in line with instructions given by you. This means the firm will manage your portfolio and will make alterations without checking with you.
  • An advisory service is where the firm will make recommendations based on your attitude to risk and circumstances, but you will need to agree to any changes before they are made to your portfolio.

In both cases, the firm has an ongoing responsibility to make sure that your investment portfolio remains suitable for you. This includes your attitude to risk and investment objectives. 

This is different to transactional advice, where the firm is only responsible for the suitability of investments at the time that the advice is given.

If you are thinking about signing up for wealth management, or are already a customer, here are some things to consider to make sure you get the service you expect

Make sure your records are up to date

To provide you with a suitable investment portfolio, your wealth manager will need current, accurate and detailed information on your financial situation and personal circumstances. This could include your:

  • savings
  • investments
  • income
  • financial commitments 

If your wealth manager gets in touch to check whether the information they have is up-to-date, you should let them know if your circumstances, investment goals, or risk appetite have changed in any way. 

Out-of-date information may have an impact on the service you receive. You may not be getting an investment portfolio that is right for your current needs and circumstances.

Understand the service you have signed up to

Wealth management firms offer a range of services to customers. 

This could be a portfolio tailored to your individual needs, or a service where customers with similar risk appetites and investment objectives are grouped and managed together. 

These are just two examples of the many services available. Contact your firm to confirm the details of the service you have signed up to.

Be clear about your investment objectives

Investment portfolios should match your financial aims and circumstances. 

Think about what you want to achieve from your portfolio and whether your wealth manager understands this. 

For example, are you looking to generate a regular level of income or achieve a certain level of growth in the value of your portfolio, and over what period of time?

Understand the risks of investing

Wealth managers need to have an in-depth understanding of the level of risk you are willing to take, as well as the extent of any losses you could afford to suffer.

The investments within your portfolio(s) may involve a variety of risks, including the type of investments you hold and where in the world your money is invested.

You should also let your wealth manager know if you think you may want to access part or all of your money at some point. Some investments may take longer to be cashed in, so this will be an important factor when building your investment portfolio.

Know what you are being charged

Some wealth managers charge for their service through an annual management charge (usually a percentage of the value of your portfolio). Others may charge through commission on each trade that they carry out. 

There are also some wealth managers that charge through a combination of an annual management charge and commission.

Make sure you know how your wealth manager is charging you for the service that is being provided. Make sure you also know how important information about your portfolio, such as details of your holdings and their performance, will be reported to you and when.