Is Becoming a Wealth Manager Right for You?

A clear definition of what a wealth manager is can help you determine if becoming a wealth manager is a right fit for your practice. Being a wealth manager gives you the opportunity to guide clients throughout their entire financial life. It’s more than managing a client’s wealth. It includes the protection of wealth, the accumulation of wealth, the management of wealth and the distribution of wealth. It considers an individual’s complete financial picture, ranging from short-term to long-term goals.

Becoming a wealth manager gives your clients the simplicity of having a primary, go-to financial professional. You help guide them through the complex world of financial decisions throughout their lives.

The suite of services you provide after becoming a wealth manager includes:

Investments

As a wealth manager, you help your client develop a strategy to manage and help grow their assets based on their goals and risk tolerance. This includes strategies to diversify and streamline their investments, and allows for modification along the way to adjust to changing needs. Areas of focus can include:

• Managing investment assets to be put towards a large purchase or expense, like a second home, college tuition or a vehicle.
• Investing assets received through inheritance.
• Diversifying holdings tied to a single investment or individual stock.
• Managing stock options or non-qualified benefits (such as deferred compensation).
• Consolidating accounts with multiple financial professionals down to a smaller number.

Tax planning strategies

A critical component of wealth management is knowing your client’s tax situation and taking advantage of short- and long-term opportunities to help minimize taxes. As a wealth manager, some of the things to consider are:

• Contributions into employer-sponsored plans.
• Contribution limits or opportunities to individual IRAs based on your client’s income.
• Assets that are taxable vs tax-deferred.

Retirement planning

A wealth manager provides a strategy that outlines the appropriate steps to help maximize the money your client has in retirement. This involves looking at all their sources of income:

• Pensions, 401(k)s and other retirement accounts.
• Savings and accounts designated for retirement assets
• Social Security.

Once they reach retirement, you then help drive an income withdrawal strategy, which defines:

• The timing and amounts of withdrawals.
• The order in which accounts are used.

Protection planning

After becoming a wealth manager, you also help your client manage risk. Taking stock of their insurance coverage can help identify ways to protect their financial goals. This includes:

• Reviewing insurance coverage to ensure sufficient income replacement for your client’s loved ones in the event of their premature death or disability.
• Looking into potential liabilities associated with their occupation.
• Planning ahead for long-term care expenses.
• Consolidating multiple life insurance policies, when applicable, to help reduce costs and make them more manageable.

Estate planning

Helping your client leave a legacy to their loved ones, minimize estate taxes and fulfill their charitable wishes is another aspect of what a wealth manager is. This means addressing:

• How your client’s estate will be distributed.
• Whether they pay taxes now or after their death.
• How to address large, illiquid assets.
• Planning for incapacity, such as power of attorney, durable power of attorney for healthcare, wills and advance medical directives.

Current financial position

Wealth management helps your client prepare for life events so they are better able to handle them financially. You may help develop strategies to:

• Navigate significant life events such as marriage, divorce, the passing of a family member, illness, a new job or the birth of a child.
• Pay off debt to help reduce financial strain.
• Manage finances in a blended marriage or significant other relationship.

A wealth manager may coordinate with experts like bankers, lawyers or accountants to build a client’s wealth management strategy.

Reasons for becoming a wealth manager

Providing holistic financial planning and delivering an exceptional client experience can help you grow your business. Holistic financial planning delivers:

• 96% client retention rate.¹
• 47% higher growth of assets under management.²
• 25% growth in new client acquisition.¹
• 67% growth in the number of new clients.²

The holistic approach of wealth management helps provide people with a more personalized service. The potential benefits are clear. It means your clients have one financial professional that is looking at their complete financial picture and working with a much deeper understanding of their personal goals and situation. This helps build trust and solidify client loyalty. It gives you the chance to become even more indispensable to your client.

It also lets you keep more of their business. Instead of sending them to someone else for a product or service you don’t offer, you can offer a full array of products and services. You don’t have to worry about someone else earning your client’s loyalty and taking business away from you.

This value-added approach also provides more personalized options than what your client may get with do-it-yourself or automated alternatives, which mostly use averages rather than a client’s actual situation. In addition, these value-added services could also help justify fees that may appear higher than the do-it-yourself or automated alternatives.

How to become a wealth manager

Now that you know what a wealth manager is, it’s important to also know how to become one.

Much of what a wealth manager does is focused on financial planning. This is why you should consider getting your Certified Financial Planner® certification. The CFP® certification is the standard of excellence in financial planning. CFP professionals meet rigorous education, training and ethical standards, and are committed to serving their clients’ best interests today to prepare them for a more secure tomorrow.

Other certifications

There are many other wealth and asset management certifications that can provide you with qualifications to help you become a wealth manager. Some of these certifications for wealth managers include:

Chartered Financial Consultant (ChFC): Advanced financial planning for every person and every need. Get comprehensive and applied financial knowledge to serve a wide variety of modern clients.
The ChFC® program covers a must-have list of requirements for financial advisors, from knowledge on tax and retirement planning to special needs advising, wealth management, insurance, and more.

Wealth Management Certified Professional (WMCP): The WMCP® program delivers evidence-based strategies that equip financial professionals with the knowledge to develop sophisticated plans that meet a range of client goals. By utilizing investments and financial products, tax strategies, and effective communication to manage behavioral challenges, wealth transfers, and asset management, financial professionals can use the skills they learn in the WMCP® program to improve outcomes for their clients.

Licensing requirements

To qualify as a wealth manager, you must be an Investment Advisory Representative. To become an IAR, individuals must pass the appropriate licensing exam or exams and register with the appropriate regulatory bodies:

Most states require the Series 63, which entitles the financial advisor to conduct business within its borders.

States also require the Series 65, but only for financial advisors compensated with fees as opposed to commission. Individuals who hold a professional designation like the CFA or CFP may be eligible to have their Series 65 requirement waived.

Wealth managers are also required to have various securities licenses to sell investment products. Common licenses held include the following:

The Series 6 enables financial professionals to sell packaged securities, such as mutual funds and variable annuities. A financial professional with only a Series 6 may not sell individual stocks or bonds.

The Series 7 enables a financial professional to sell nearly every type of investment product. A Series 7 licensee may sell stocks, bonds and options. The license also authorizes the sale of packaged securities, even if you do not carry an active Series 6 license.

Becoming a wealth manager

Ultimately, financial strategies that allow clients to better design the coverage and support they need are likely to become increasingly popular over the coming years. People want to live with flexibility and freedom. They want to use their wealth in a way that aligns with their personal goals and aspirations.

As you work to decide if becoming a wealth manager is right for you, also think about how managing your clients’ wealth is becoming more challenging than ever. Shifting regulations, evolving technologies and clients’ increased expectations have required many financial professionals to transition into more comprehensive practices.

Ameritas has many advantages which support becoming a wealth manager. Our goal is to provide you with the knowledge, resources and tools to help you run an efficient, effective, profitable wealth management business. Learn more about wealth management products and offerings from Ameritas to help grow your business.

Sources and References:

¹eMoney Heart of Advice Research Report, September 2022
²Fidelity Insights, July 2021

Investment advisory and financial planning services are offered through Ameritas Advisory Services, LLC (AAS).