Do You Qualify for Wealth Management?


Wealth management is a term that has been utilized for many years in the financial services industry.  It is a term that often evades complete definitions.  Many investors also have confusion regarding who qualifies for wealth management services and if different financial firms provide wealth management.

According to recent Spectrem Group research, 85 percent of investors are familiar with the term “wealth management”.  That familiarity increases as wealth increases, with just over two thirds of investors with a net worth between $100-$499K, not including primary residence being familiar with that term, while virtually all investors with $10MM in net worth, not including primary residence are familiar with that term.

The percentage of investors who currently receive wealth management services follow a similar pattern, with 14 percent of investors with lower net worth receiving wealth management services, while 65 percent of investors at the highest levels of net worth receive wealth management services.  This is logically mirrored by the percentage of these wealthy investors utilization of a financial advisor.  Over two thirds of investors at the highest wealth levels use an advisor, while those investors who are at lower wealth levels are less likely to utilize a financial advisor.

Among those who work with a financial advisor, it is not always clear if their advisor works or promotes itself as a wealth management firm.  Nearly a third (32%) of investors do not know if the firm their advisor works for promotes itself as a wealth management firm.  Forty percent of investors are working with an advisor whose firm promotes itself as a wealth management firm.  This lack of clarity can make it challenging for investors to understand what their financial provider offers.  Investors need to understand what their advisor and their firm provides to ensure they are taking full advantage of what is available.

Is wealth management services something that is appropriate for everyone?  Should individuals at various wealth levels use wealth management services?  Thirty-four percent of investors at lower wealth levels feel that wealth management represents services appropriate for themselves.  This is in stark contrast to nearly three-quarters (71%) of those investors at the highest levels of wealth who feel that wealth management services are appropriate for individuals like themselves.  Over half of investors at lower levels of wealth feel that wealth management is for people who are richer than they are, while only 11 percent of investors at the highest levels of wealth feel that way.

What level of net worth is high enough to qualify for wealth management?  Twenty-seven percent of investors feel that someone needs at least $250,000 to qualify, while 23 percent feel they need at least $500,000.  Thirty percent of investors feel that $1 million would be the level of net worth to qualify for wealth management.

Wealth management is something that increasingly is becoming more accessible for many investors, regardless of wealth or other demographic considerations.  Utilizing an advisory firm that offers wealth management services is something that investors should consider if they are not already using a firm in this manner as this offering is something that can provide benefits to achieving financial success.