There is no standard definition for wealth management that will be generally accepted, though according to Maude “a basic definition for wealth management would be financial services provided to wealthy clients, mainly individuals and their families” (Maude, 2006).
“a type of financial service that combines personal investments, tax planning strategies, estate planning and legal counsel. It is designed to provide a broad array of services within the confines of one office”
Detailing the key elements that differentiate their services from other forms of retail financial institutions, wealth managers draw attention to the exclusiveness of their client relationships, which are extensive in that they cover all aspects of a client’s financial life, and with great respect to the adviser’s devoted knowledge of a client’s priorities and values. Likewise, this breadth and depth of the manager-client relationship allows the wealth manager to form and apply specially designed solutions that meet all key elements of a client’s financial welfare. The following three criteria distinguish a firm as a wealth manager:
- The relationship between wealth managers and their clients, in regard to both terms of breadth (such as “holistic”, “comprehensive”, and “all-inclusive”) and depth (“intimate” and “individualised”).
Since wealth management has scored the fastest growing in late 1990, all of the financial services industry sector and even through the recession after that wealth management still attracts investors. In term of the population growth the number of millionaires till 2006 the number increased which is more than 7% a year referring to the devolved in the economy in Europe and North America.
“Given that financial markets and economic growth in 2008 has been far worse so far than 2007, I expect flat growth or a contraction in the millionaire population in 2008. ...
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Wealth Creation: Primary Responsibility of Managers? Milton Friedman (1970) categorically claimed that the primary responsibility of managers is to protect the fiduciary gain of the shareholders/owners of the company that they are servicing. The moment managers veer away from this ethos, they commit an immoral act.
Every human activity has its own objective. Unless the objective is clearly defined, application of necessary efforts required to achieve it is not considered a priority. The objects and aims define the necessary efforts required to achieve the objectives. Being a human activity, management is a product of aims and objectives.
To be able make the most of your assets and being a happy investor would be to have the right asset management goal, strategy, and at the same time know which asset risks you would have to take in to be able to grow it. One of the most powerful chapter of the book talks about the eight principles of strategic wealth management where two of which really made a lot of sense especially when it comes to Asset Management.
However, the world is showing good signs of recovery. Economic performance in countries around the world is reflecting a positive trend. Total wealth of the world (in terms of the wealth possessed by the high net worth individuals (HNWIs) around the globe) has reached significant high values in the year 2012.
Diversification of investment spreads the risk over many assets. The concept of simple portfolio diversification is that some securities may not perform as anticipated but other assets might exceed in performance making the actual return of the portfolio reasonably close to anticipated return.
Within this context the idea of ownership becomes the overriding factor.
In his book the Wealth of Nations (1776) 1Adam Smith spoke of various models of social organization where he has analysed presentations of pre-capital accumulation and the resultant effects of
twenty percent of the money, the main focus ought to be given optimal service to the twenty percent customers who yield eighty percent money value, (Heil, Parker, and Stephens, 1999). This discretionary attention given to clients is facilitated by a process known as Client
Investment involves allocation of funds among investment projects in expectation of future cash inflows from the investment projects (PANDEY, 1979). Investment managers are therefore expected to make long term decisions and to make prudent