Are Wealth Management Services Right for You?

9/1/2021

Wealth management services have often been viewed by many investors as something that only the wealthiest of investors are eligible for.  Some firms have minimum asset amounts for clients to be eligible to receive wealth management services, further adding to the perception of investors that there is a minimum amount of assets that would make someone eligible for wealth management.

Before an investor can identify if they receive wealth management services or not, they must first be familiar with the term “wealth management” and understand  what those services are.  Nearly all investors with a net worth above $10 million are familiar with the term wealth management.  Just over two-thirds of investors with a net worth between $100,000 and $499,999 are familiar with that term, while three quarters of those investors who have a net worth between $500,000 and $1 million are aware of that term.

Given that most investors are familiar with the term, it is critical to understand what level of net worth investors believe qualifies someone for wealth management services.  It is not surprising that as net worth increases, so does the level of net worth investors feel is needed to qualify for wealth management, with 20 percent of investors with a net worth between $15 to $25 million feel that an investor needs at least $5 million to qualify.  Forty-three percent of investors with a net worth between $100,000 - $499,999 feel that an investor only needs $250,000 to qualify for wealth management services.

With so many investors feeling that the level of net worth needed for wealth management is the same level of net worth they have themselves it is interesting to examine if investors feel wealth management is appropriate for individuals like themselves.  Less than half of investors with a net worth below $3 million agree that wealth management provides services appropriate for someone like themselves.  That percentage jumps to 71 percent among those investors with a net worth between $15 million and $25 million.

Knowing that many feel wealth management is suitable for themselves, do investors feel they have enough assets to qualify?  A quarter of those investors with a net worth between $100,000-$499,999 feel they have enough assets to qualify, while nearly all of investors with a net worth between $15 million and $25 million are confident they have enough assets to qualify for wealth management.  Overall, 57 percent of investors believe they have enough assets to qualify for wealth management, yet how many are actually receiving wealth management?

Just over a third of investors indicate that they currently receive wealth management services, according to research from Spectrem Group.  That percentage drops to only 14 percent for those investors who have a net worth between $100,000 and $499,999.  Two-thirds of investors with a net worth between $15 million and $25 million receive wealth management services.  That leaves nearly two-thirds of investors who could receive wealth management services, they may just feel they don’t qualify or that the services aren’t suitable for themselves.