What is Wealth Management?
An intro to the industry, who advisors serve, and what they do
We hear the term “Wealth Management” used around all the time, but have you ever really thought about what it means? If you were sitting across from a current or potential boss and they asked you, what is wealth management? how would you answer?
It’s a broad term that can seem vague at first, but it’s actually a structured process that ties together many different financial disciplines. This week, I’m breaking it down to help The GenZ Advisor community understand what wealth management is, who needs it, and how to get started in the industry.
What is Wealth Management?
Wealth management is an advisory service that helps clients manage and grow their financial resources using a combination of investment strategies, financial planning, and specialized financial products.
A financial advisor or wealth manager works to understand a client’s specific situation and goals. From there, they build a personalized strategy to help clients achieve those goals whether it’s growing their wealth, minimizing taxes, planning for retirement, or passing wealth to future generations.
Why does this Matter to you?
As a young or aspiring advisor, understanding these concepts early gives you a competitive advantage. This knowledge can be valuable when applying for your first job, networking, or even later when meeting prospective clients.
Key Areas of Wealth Management
Wealth management takes a comprehensive approach to a client’s financial situation. While every client is different, most wealth management strategies focus on the following areas:
Investment Management.
Financial Planning.
Estate Planning.
Insurance Planning.
Tax Planning.
Private Wealth & Family Office Services.
Business Succession & Exit Planning.
Philanthropic Planning.
Banking Solutions.
Behavioral Finance & Client Psychology.
The more wealth a client accumulates, the more these areas tend to overlap in their financial life.
Who is Wealth Management For?
A common misconception is that only wealthy individuals need wealth management, but that’s not true. Wealth management can benefit anyone from young professionals just starting out to wealthier individuals with complex financial needs.
Types of Clients Wealth Managers Serve
In this industry wealth managers and financial advisors have the ability to serve a diverse group of people. Here’s a breakdown of potential client profiles:
High-Net-Worth Individuals (HNWIs): Those with over $1 million in investable assets, they typically require comprehensive financial planning.
Ultra-High-Net-Worth Individuals (UHNWIs): Clients with over $30 million often require family office services, tax optimization, and legacy planning.
Business Owners & Entrepreneurs: These clients need help with liquidity events (such as selling a business), tax-efficient investing, and succession planning.
Corporate Executives: Executives often require stock option planning, deferred compensation strategies, and estate planning.
Young Professionals & Wealth Builders: Even if you’re just starting out, optimizing savings, investing early, and setting up a financial plan can lay the foundation for future wealth.
As wealth grows, financial needs become more complex, making wealth management an invaluable service. If you can identify a group of individuals with specific financial needs who are currently underserved, this could be an opportunity to develop your niche, a specialized client base with shared challenges and goals. Finding the right niche early on can help you differentiate yourself and build deeper expertise in a specific area of wealth management.
The Role of a Wealth Manager
A wealth manager (or financial advisor) acts almost like a personal CFO for their clients. It’s not just about stock picking or selling financial products exceptional advisors take a holistic approach to a client’s entire financial life.
What a Wealth Manager Does:
Investment Strategy & Portfolio Management.
Comprehensive Financial Planning.
Tax-Efficient Wealth Transfers.
Business Transition & Succession Planning.
Helping Clients Navigate Emotional Financial Decisions.
A great advisor adds value to a client’s life financially but also emotionally, by providing clarity and confidence around money.
Wealth Management vs. Financial Planning
Many people use the terms “wealth management” and “financial planning” but they’re not the same.
Financial Planning focuses on a client’s short to medium term financial goals like saving for retirement, budgeting, and basic investment strategies. It’s more tactical and goal based.
Wealth Management takes a long term, strategic approach by integrating investments, tax planning, estate strategies, and family office services into a comprehensive financial plan.
How to Get Started in Wealth Management
If you’re looking to break into the industry, it can feel overwhelming. There’s a lot to learn, but as I shared in last week’s Advisor Journeys post covering the story of a Client Service Associate there are multiple paths into wealth management.
Learn the Fundamentals & Get Certified: The best way to stand out early is to take the Securities Industry Essentials (SIE) exam. This is a test that covers the basics of the securities industry and doesn’t require firm sponsorship making it a great first step. Many firms prefer candidates who have already passed it.
Take the Series 66 Exam: Once you pass the SIE, you can also take the Series 66 exam. This qualifies you to become an Investment Advisor Representative (IAR). However, keep in mind that your Series 66 license won’t be valid until you pass the Series 7 and get sponsored by a FINRA member firm.
Secure Firm Sponsorship & Take the Series 7: To become a fully licensed wealth manager, you’ll need a firm to sponsor you for the Series 7 exam. This is the industry standard for General Securities Representatives and is required before your Series 66 can be used.
Throughout college I had the opportunity to take the SIE and Series 66, which gave me a tremendous head start in understanding the industry. I was even able to take and pass my Series 7 after securing sponsorship an incredible chance to advance ahead of many of my peers. Most people don’t get this opportunity until after graduation, making it a major advantage. If you can take these exams early, you’ll stand out and demonstrate your commitment to the industry.
In a future post, I’ll break down the licensing and sponsorship process in more detail.
Why Wealth Management Matters
Early on, I developed a strong interest in personal finance, budgeting, investing, and staying up to date with the markets. Naturally, I decided that a career in finance made sense. But I didn’t just want to crunch numbers, I wanted to help people, make a meaningful impact, and align my career aspirations with that idea.
At the same time, I wanted a career that offered strong earning potential and a sense of entrepreneurship. Becoming a financial advisor checked all the boxes it allowed me to follow my interests, help people, build wealth, and carve my own path as an entrepreneur. To me, it struck the perfect balance between everything I valued in a career.
If you’re looking for a finance career that offers long-term earning potential, intellectual challenge, and the opportunity to truly help individuals and families, wealth management may be the field for you.
If you’re considering a career in wealth management, what’s your biggest question right now? Why are you interested in this career path?
Sources
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