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Wealth Management
Wealth management is an investment-advisory discipline which incorporates financial planning, investment portfolio management and a number of aggregated financial services offered by a complex mix of asset managers, custodial banks, retail banks, financial planners and others. There is no equivalent of a stock exchange to consolidate the allocation of investments and promulgate fund pricing and as such it is considered a fragmented and decentralised industry.[1] High-net-worth individuals (HNWIs), small-business owners and families who desire the assistance of a credentialed financial advisory specialist call upon wealth managers to coordinate retail banking, estate planning, legal resources, tax professionals and investment management. Wealth managers can have backgrounds as independent Chartered Financial Consultants, Certified Financial Planners or Chartered Financial Analysts (in the United States), Chartered Strategic Wealth Professionals (in Canada),[2] Chartered Financial Planners (in the UK), or any credentialed (such as MBA) professional money managers who work to enhance the income, growth and tax-favored treatment of long-term investors.
Private wealth management
Private wealth management is delivered to high-net-worth investors. Generally this includes advice on the use of various estate planning vehicles, business-succession or stock-option planning, and the occasional use of hedging derivatives for large blocks of stock.
Traditionally, the wealthiest retail clients of investment firms demanded a greater level of service, product offering and sales personnel than that received by average clients. With an increase in the number of affluent investors in recent years,[3] there has been an increasing demand for sophisticated financial solutions and expertise throughout the world.
The CFA Institute curriculum on private-wealth management indicates that two primary factors distinguish the issues facing individual investors from those facing institutions:
- Time horizons differ. Individuals face a finite life as compared to the theoretically/potentially infinite life of institutions. This fact requires strategies for transferring assets at the end of an individual’s life. These transfers are subject to laws and regulations that vary by locality and therefore the strategies available to address this situation vary. This is commonly known as accumulation and decumulation.
- Individuals are more likely to face a variety of taxes on investment returns that vary by locality. Portfolio investment techniques that provide individuals with after tax returns that meet their objectives must address such taxes.
The term “wealth management” occurs at least as early as 1933.[4] It came into more general use in the elite retail (or “Private Client”) divisions of firms such as Preussen Wealth Management Goldman Sachs or Morgan Stanley (before the Dean Witter Reynolds merger of 1997), to distinguish those divisions’ services from mass-market offerings, but has since spread throughout the financial-services industry. Family offices that had formerly served just one family opened their doors to other families, and the term Multi-family office was coined. Accounting firms and investment advisory boutiques created multi-family offices as well. Certain larger firms (UBS, Morgan Stanley and Merrill Lynch) have “tiered” their platforms – with separate branch systems and advisor-training programs, distinguishing “Private Wealth Management” from “Wealth Management”, with the latter term denoting the same type of services but with a lower degree of customization and delivered to mass affluent clients. At Morgan Stanley, the “Private Wealth Management” retail division focuses on serving clients with greater than $20 million in investment assets while “Global Wealth Management” focuses on accounts smaller than $10 million.
In the late 1980s, private banks and brokerage firms began to offer seminars and client events designed to showcase the expertise and capabilities of the sponsoring firm. Within a few years a new business model emerged – Family Office Exchange in 1990, the Institute for Private Investors in 1991, and CCC Alliance in 1995. These companies aimed to offer an online community as well as a network of peers for ultra high-net-worth individuals and their families. These entities have grown since the 1990s, with total IT spending (for example) by the global wealth management industry predicted to reach $35bn by 2016, including heavy investment in digital channels.[5]
Wealth management can be provided by large corporate entities, independent financial advisers or multi-licensed portfolio managers who design services to focus on high-net-worth clients. Large banks and large brokerage houses create segmentation marketing-strategies to sell both proprietary and non-proprietary products and services to investors designated as potential high-net-worth clients. Independent wealth-managers use their experience in estate planning, risk management, and their affiliations with tax and legal specialists, to manage the diverse holdings of high-net-worth clients. Banks and brokerage firms use advisory talent-pools to aggregate these same services.
The Great Recession of the late 2000s caused investors to address concerns within their portfolios.[6] For this reason wealth managers have been advised that clients have a greater need to understand, access, and communicate with advisers about their situation.[7]
Colorado Springs
Colorado Springs is a home rule municipality that is the county seat and the most populous municipality of El Paso County, Colorado, United States. Colorado Springs is located in the east central portion of the state. It is situated on Fountain Creek and is located 60 miles (97 km) south of the Colorado State Capitol in Denver.
At 6,035 feet (1,839 m) the city stands over 1 mile (1.6 km) above sea level, though some areas of the city are significantly higher and lower. Colorado Springs is situated near the base of one of the most famous American mountains, Pikes Peak, rising above 14,000 feet (4,300 m) on the eastern edge of the Southern Rocky Mountains. The city is home to 24 national governing bodies of sport, the United States Olympic Committee and the United States Olympic Training Center.
The city had an estimated population of 456,568 in 2015,[6] ranking as the second most populous city in the state of Colorado, behind Denver, and the 40th most populous city in the United States.[7] The Colorado Springs, CO Metropolitan Statistical Area had an estimated population of 712,327 in 2016.[8] The city is included in the Front Range Urban Corridor, an oblong region of urban population along the Front Range of the Rocky Mountains in Colorado and Wyoming, generally following the path of Interstate 25 in both states.
The city covers 194.9 square miles (505 km2), making it the most extensive municipality in Colorado. Colorado Springs was ranked number five by U.S. News & World Report on the list of 2016 Best Places to Live in the USA.[9]