When it comes to managing a wealth corpus, most people turn to wealth management service providers for professional advice. Whether you have spent your entire life accumulating a wealth corpus or inherited one from your parents and grandparents, managing this wealth is critical to ensure it is preserved for the next generation. This article explores reasons why people turn to wealth management advice in detail.
Reasons why individuals seek wealth management advice
Individuals may seek wealth management advice for the following reasons:
Obtain personalised financial planning guidance
While there is a wealth of knowledge available on the internet today, most of it is generic. Such advice is not tailored to align with your unique goals, financial standing, or life stage. To access tailored advice, you will have to partner with a wealth management advisor. Wealth managers specialise in understanding your financial goals, aspirations, and life stage needs to formulate a personalised financial plan. This customised approach to advice helps formulate actionable strategies that perfectly align with your goals.
Manage risks and uncertainty
Individuals often seek wealth management advice to navigate through periods of uncertainty in the market. Apart from market uncertainty, you also have to be prepared for unexpected events and expenses that can risk your financial stability. By seeking wealth management advice from professionals, you can understand how to mitigate these risks effectively. For instance, wealth managers can advise portfolio diversification as a strategy to manage market risks, while recommending insurance coverage, emergency funds, and other strategies to safeguard your wealth against risks in your personal life. Having these areas covered ensures better peace of mind.
Optimise tax benefits
Tax planning can be a challenging process to complete on your own. Keeping tabs on various sections, compliance requirements, forms, and deadlines can be difficult. That’s why many people resort to the expert guidance and advice of professional wealth managers. Wealth managers offer advice on how to minimise tax liabilities legally to better grow and preserve your wealth. These professionals identify various strategies to ensure you retain the wealth you have accumulated. These strategies can include making tax-saving investments that qualify for deductions u/s 80(C), structuring investments to reduce capital gains taxes, making charitable donations to organisations that qualify for 80(G) deductions, and planning trusts.
Access professional expertise in investment management
One of the primary reasons to collaborate with a wealth management advisor is investment management. Most people seek the advice of these professionals to draw up a customised investment plan that allows their wealth to grow. Wealth advisors leverage years of experience and expertise to offer advice on the right types of investment instruments you should include in your portfolio. Most wealth advisors emphasise on the importance of a diversified portfolio with a mix of various assets including market-linked instruments like stocks and bonds and fixed-income options like NBFC FDs. They help you curate a portfolio that can minimise the impact of market volatility, ensuring good long-term returns and stable wealth growth.
To effectively prepare for retirement
Given the rising cost of healthcare and increasing life expectancy, many individuals are seeking wealth management services to get advice on how to plan their retirement better. From pension plans to government-backed schemes like PPF, there are various options available in the market. Wealth management advisers help you sift through these options to ascertain which one suits you best based on factors like your age, financial standing, and retirement goals. Working with a wealth manager helps you ascertain how much you need for your retired life, select suitable retirement accounts, and develop conducive withdrawal strategies.
Plan their legacy
Many individuals seek advice from wealth managers to plan their financial legacy to ensure that their wealth is well-preserved for the future generations. Based on the advice given by these experts, legacy planning can look like different things to different people. It can be advice on how to structure your estate, or set-up trusts, or simply notes on how to prepare a will that outlines the distribution of assets. Regardless of the mode of planning, the goal remains to minimise estate taxes and ensure a smooth transfer of wealth to the next generation.
Conclusion
You may seek wealth management for different reasons. You may need assistance planning your taxes or you may require financial guidance to better plan investments. Regardless of the reasons, a good wealth advisor should be able to offer customised advice based on your goals and risk tolerance to help you grow, preserve, and retain your wealth. With a good wealth management advisor on your side, you can make the process as simple as shopping at an online marketplace.