Wealth management is only for the very rich

Relatively few people consider themselves to be ‘wealthy’. We generally tend to assume that wealthy is a label applied to other people, with surveys suggesting ‘wealthy’ is only applicable to someone with a net worth of around £10m.

But many people have become in increasing need of wealth management services over the past twenty years. A decade long rise in asset prices, the shift to personal pension schemes, and higher inheritance values have all increased the number of people who require – and who are eligible for –  wealth management.

Why might I need wealth management?

People approach us for wealth management for many different reasons.

Our clients often find that their financial affairs have become too complicated for them to manage by themselves. This is almost inevitable as families grow; someone in their twenties will typically have fairly simple financial requirements, largely limited to saving for a house or starting a pension.

Those in their thirties and beyond, however, may need to think more carefully about lifetime pension allowances, including how to deal with lump sum investments from inheritances or how they will manage their own inheritance and investment planning, which may also require financial planning advice from a financial adviser. Indeed, a significant proportion of our business is referred to us by financial advisers, who understand the benefits that discretionary wealth management offers individuals.

What do you offer that I cannot do myself?

Aside from our wealth management expertise, you are also paying for our time managing your portfolio. Staying on top of markets – and thinking about the implications of investment decisions to buy and sell – is often a full-time job in itself. And on top of thinking about what you invest in, you also need to make sure you fully utilise your tax allowances each year.

With the amount of information online, it is possible to manage your wealth yourself and do a good job of it. But you need to be careful to avoid common behavioural errors, such as failing to apply a proper investment strategy or not diversifying properly. The most commonly bought shares on Hargreaves Lansdown, for example, all feature UK companies, suggesting that some DIY investors are failing to diversify their portfolios sufficiently, or to take advantage of other asset classes and geographical areas.

Can I afford wealth management?

Our standard Annual Management Charge is 1% plus VAT. For a complete overview of our fees, including any other additional charges, please refer here. If you do choose to invest with us, you will have your own dedicated investment manager, who will manage your portfolio in line with your agreed parameters and financial situation, and ensure that it is positioned appropriately as markets change.

The cost of DIY investing should also be borne in mind. Whilst doing it yourself may appear, on the face of it, to be the more cost effective option, investment platform fees generally vary from 0.1% to 0.45% per annum, with the more expensive platforms typically offering a greater range of investments. You also need to factor in trading costs if you use share dealing services, and the individual cost of funds if you decide to invest in these. This is before considering the time cost of monitoring your investments, enacting a proper asset allocation, and ensuring that your portfolio is sufficiently diversified.  

What level does wealth management start at?

While each wealth management firm will have its own minimum investment levels, our Managed Portfolio Service is available to those with £25,000 to invest, while our Discretionary Portfolio Service begins at £200,000. For more information on how we can help you manage your investments, download our ‘Why you deserve bespoke brochure, or contact an investment manager using the form on the right hand side of the page.