Financial Services

wealth management businessman playing chess

Predictions 2021: Wealth Management Firms Embrace Digital To Thrive

By Financial Services, Information Technology No Comments

We will remember 2020 for COVID-19, how it permanently changed the ways customers seek advice, and how financial advisors dispense it. As the lockdown began, consumers did not have access to a physical branch or office, did not know what investment decisions made sense, and lacked access to customer service or support. Wealth management firms predicted it was time to embrace digital to thrive in the ever-evolving “new world” entered.

These challenges exposed underlying gaps and customer pain points that existed prior to the pandemic. Solutions, however, have been hiding in plain sight. Innovative wealth-tech firms are using digital technologies to drive better digital experiences for customers and more efficient ways to receive financial advice. They include digital onboarding that allows customers to open and fund a new account in less than five minutes and digital servicing that allows customers to connect short-term financial wellness with longer-term financial goals.

Beyond the pandemic, environmental crises such as wildfires in the western United States and global social unrest highlighted the importance of sustainability. Environmental, social, and governance (ESG) is an increasingly common topic in client conversations. Consumers now include addressing climate change and supporting social causes in their investing agenda. Forrester sees ESG playing a significantly larger role in wealth management in 2021 for retail investors, wealth management firms, and portfolio managers. Sustainability has thus far been a point of differentiation. In the years to come, it will be table stakes.

For most wealth management firms, capitalizing on these trends will enable them to acquire more customers. But in a world where fees are racing toward zero, achieving profits will remain challenging for firms that offer only a limited set of products and solutions to their customers. Wealth managers will have to expand their product offerings to remain relevant and profitable.

Planning ahead in financial services is difficult in any circumstance, particularly in a pandemic. But one thing is certain: Now is the time to use the momentum that 2020 has brought to digital acceleration to reshape the future of your business.

Read the original article here

wealth management man holding lightbulb

What Is Wealth Management, and Do You Need It?

By Financial Services

Wealth management firms offer investment management and comprehensive financial advice. Wealth managers handle complex financial issues and coordinate financial experts on behalf of clients.

Wealth management is the highest level of financial planning services. Wealth management generally includes comprehensive investment management alongside financial advice, tax guidance, estate planning and even legal assistance.

The type of service offered by a wealth management firm is best suited to affluent clients. But while you may not require wealth management now, your needs are likely to change over time. At some point, it may be time to look into wealth management.

Wealth management: What is it?

Wealth management is the most advanced form of investment advisor services. A wealth advisor typically creates a specially tailored investment strategy and plan for their clients to help them manage their assets.

Wealth managers generally aim their services at the highly affluent and may have expertise in the types of financial questions that affect the ultrawealthy, such as how to avoid the estate tax. They often coordinate services among different experts, such as working with a lawyer or an accountant on your behalf.

How much money do you need for wealth management?

In short: A lot. Wealth management services often require steep account minimums. For example, Fidelity’s “private wealth management service,” where you have an entire team of financial professionals working on your behalf, requires at least $2 million invested through Fidelity Wealth Services and $10 million or more in total investable assets.

Fidelity also offers a simpler “wealth management” service, where you work with an individual advisor and requires a $250,000 account minimum.

Vanguard, another online brokerage, offers a range of financial advice services; the one it describes as “wealth management” requires a $5 million minimum.

Is a wealth manager worth it?

A wealth manager should be able to assist with all of your financial planning needs, up to and including, for example, managing the tax ramifications of business income and setting up a donor-advised fund for your charitable contributions.

Financial planners may offer similar services to wealth managers, but often they’ll let you purchase services on an “a la carte” basis. For example, if all you want is help to figure out how you’ll meet your retirement income needs, some financial planners will work with you to create a retirement income plan, and you pay solely for that service.

If you need assistance estate planning, specialized tax help or investing advice, it may be worth getting professional help now to protect and preserve your assets later.

Wealth management vs. portfolio management

Wealth management offers more complete financial planning than portfolio management. It includes comprehensive guidance on a client’s financial situation, including investment management, estate and tax planning, accounting, retirement planning and even legal guidance in some cases.

Portfolio management refers to a service or person who crafts an investing strategy on behalf of a client. Portfolio management involves picking investments that minimize risk and maximize returns but typically does not include other financial planning services.

Wealth management alternative: online financial planning services

If those wealth-management minimums are more than you bargained for, then you probably don’t need wealth management. While some financial planners also focus on ultrawealthy clients, there’s a growing cadre of financial advisors who work with both affluent and middle-income folks. Some of these advisors operate online.

Online financial advisors offer portfolio management (also called investment management) and in-depth financial planning, including access to a human financial planner. Often, these services are delivered entirely over the phone or by video conference. While you may not meet in person, you’ll work directly with a financial advisor who can help you build a holistic financial plan or reach a specific goal.

The services offered vary by provider. Facet Wealth, for example, offers unlimited access to a dedicated advisor who is a certified financial planner (CFP). You’ll pay a flat annual fee, which varies depending on the complexity of your financial needs, and the service includes investment management.

At Personal Capital, clients with more than $200,000 invested get access to two dedicated financial planners; that service and investment management is included in the 0.89% fee.

Other providers, like Vanguard Personal Advisor Services, offer ongoing access to a team of finance pros. Those professionals will answer your financial questions and help you create a financial plan, but you generally won’t speak to the same dedicated advisor each time.

Some providers will help you with specific financial questions but not others — for example, complex questions around the taxation of self-employment income might be beyond the scope of some companies.

Given all the variety, it’s important to shop around to find the service that best meets your needs.

See the original article here.

wealth management businessman playing chess

What is Wealth Management?

By Financial Services

The term “wealth management” is thrown around plenty, in the boardrooms of private client firms, in trade and mainstream articles and by financial advisors in front of clients. Still, most professionals are hard-pressed to actually define the term with any degree of precision.

Wealth management is very straightforward. From the affluent individual’s perspective, wealth management is simply the science of solving/enhancing his or her financial situation. From the financial advisor’s perspective, wealth management is the ability of an advisor or advisory team to deliver a full range of financial services and products to an affluent client in a consultative way.

Theoretically, a wealth manager can provide every single financial product in existence. In reality, most wealth managers specialize in services and products they feel most comfortable with.

A further defining quality of wealth management is that it is delivered in a consultative manner. By being consultative, wealth managers are truly client-centred. A good wealth manager meets a client without any presupposition about what financial products or services are appropriate for that affluent individual.

While it is common for a wealthy individual to be sitting with a wealth manager to address a particular need (investment management, say), the consultative wealth manager’s overriding objective is to understand the person and find out what’s important and why. Then the wealth manager is able to bring in the appropriate experts and provide the appropriate financial products.

In sum:

Wealth management is the consultative process of meeting the needs and wants of affluent clients by providing the appropriate financial products and services.

Wealth management entails coordinating a team of experts to address the needs and wants of affluent clients.

There’s considerable research showing the income advantages of financial advisors who are wealth managers to those that are principally investment-oriented. In general, a financial advisor transitioning to a wealth manager will see profits increase by 35% or more within a year. Hence, if a financial advisor’s annual income was $250,000 before becoming a wealth manager, his or her annual income will be $337,500 within a year.

See the original article here.

wealth management man working computer

Top Tips for Picking a Wealth Management Firm

By Financial Services

If you’ve been investing for a long time and want to turn the responsibility of running your portfolio over to someone else, choosing a wealth management firm is one way to do it.

Before you hire a firm, however, make sure you’ve chosen someone who really cares about your future and wants to protect your investments. Read our tips below to see what you need to look for in a wealth management firm.

Don’t Focus on Price
When you’re choosing a wealth management firm, it’s easy to judge the differences between companies by one category: price. It’s simple, straightforward, and you can’t argue that one number is smaller than the other.

Tyler Landes, CFP at Tandem Financial Guidance, LLC, says that instead of getting too fixated on price, you should focus on value. Price is what you pay, value is what you get.

“At the end of the day, I tell people to understand how an advisor gets paid, and what service or product they’re going to deliver in exchange,” he said. “Then decide if you think the value is in line with the cost. Cheaper isn’t better if the value isn’t there.”

You should also ask other clients how their advisor treats them. Also, make sure to ask the advisor who their ideal client is. Landes said that if the description doesn’t match your goals and ideas, the relationship won’t likely work. You want to feel like your advisor will care about your portfolio as much as you do.

“I’ve gained clients because their former advisor didn’t reach out to set regular meetings, and the client felt like small potatoes,” said Landes.

Ask about how often you’ll be able to meet with your advisor or how you’ll stay informed about your investments. You want to be in the loop on what’s going on.

Verify Credentials
When choosing a firm, sit down with the advisor who will potentially be working on your account. You don’t want to have an interview with one person, only to learn down the line that you’ve been handed over to someone else.

Also ask where they worked before, whether they are a Certified Financial Planner, what other qualifications they can boast. Keep in mind that you’re the client, so it’s up to the advisor to win you over so as to get your business.

You can verify whether an advisor is a CFP here, and look them up through the SEC here, or via Finra’s BrokerCheck. Don’t be afraid to do the same kind of research you would perform on a potential hire. Ask what every credential and certification means, and see whether you can find any work history or talk to current and past clients. Do your due diligence before making a decision.

How Are They Paid?
There are different ways you can pay a CFP. Some charge a commission based on the products you buy from them, while others charge a set rate based on the size of your portfolio. You want someone who’s as invested in your portfolio’s growth as you are.

Be wary of hiring anyone who earns a commission on what they sell to you; they’ll be more interested in earning that extra money than making sure what they’re selling is the best fit for your needs.

The Bottom Line
Choosing a wealth management firm may be one of the most important decisions you’ll ever make. Whoever you choose to access your accounts may change the fate of your retirement. That’s not to scare you away from making any kind of decision, but it is important to know that advisors are all different. Don’t make your decision on impulse; ask around for referrals from people you trust, and do your own deep-dive research.

See the original article here.

financial advisor

Why Every Entrepreneur Should Consider A Financial Advisor

By Financial Services

I began my career working at a large corporation where everything was handled for me: health insurance, tax withholdings, retirement plans and more. When I quit that career path a few years later to start my own company, the financial aspects were foreign to me.

As many entrepreneurs — including myself — will attest, the volatility of revenue is one of the most frustrating parts of owning a startup. For a client-funded company like ours, there can be a huge variance in the number of clients and size of retainers live at a given time. It can be a lucrative business, but without a significant investment of time and resources, it’s an inconsistently lucrative one.

For someone in her late 20s who never developed an independent financial strategy, this was obviously jarring. I had no budget plan, no retirement savings (aside from a small rollover IRA) and no sense of how to leverage my company as part of a larger strategy. My initial instinct was to do my own research. If you haven’t tried this before, don’t start now. There is a black hole of financial advice on the internet, all of it full of jargon and contradictions. I finally got a recommendation for a financial advisor from a close friend and scheduled a meeting with a long list of questions.

From the first meeting, my financial advisor was relatable and accessible — he took interest in my personal and professional life and developed a multifaceted financial strategy that actually made sense to me.

For entrepreneurs without an employer who offers a 401(k), it’s crucial to get set up for retirement (and life!), but for a novice, that is a daunting task on your own. My financial advisor set me up with diversified options that I never knew existed and explained the importance of diversifying my investments within my portfolio.

He also adjusted these plans when necessary to fit both my co-founder and me. My co-founder is middle-aged, married, a homeowner and has three kids; I am a millennial who rents and has no financial dependents except for a small dog. Our financial advisor set us up with a simplified employee pension (SEP) IRA plan that works for us both and provided information on company health plans. He also set us up with disability and life insurance policies to fulfil a buy-sell agreement for the business. For co-founders with different lifestyles and priorities, a financial advisor can build a mutually beneficial custom strategy.

Taxes present another pain point for startups, especially with ever-changing laws. There are so many variables, from how the business is registered to the types of deductions you take. As our financial strategy became more sophisticated, we needed an accountant to align our taxation process. My financial advisor set us up with an accountant in his office who handles our taxes and bookkeeping. They work together to ensure we have a comprehensive strategy and are taking advantage of everything available to us.

On a personal level, the most valuable service my financial advisor provided is perspective. He has helped a frivolous girl like me analyze her finances, identify life goals and plan for a rainy day — most importantly — never in a judgmental way.

For entrepreneurs, finances are complicated and confusing. Reliable financial advisors can help you plan for the future instead of just living in the now. They can establish comparable benefits to those provided by larger employers and set your business up for success. In addition, their unique skill set makes them a trustworthy sounding board and an invaluable part of the business.

See the original article here.

rockfin partnership handshake table

Rockfin’s partnership with Momentum Investment Consulting

By Financial Services, Partnership

Rockfin has partnered with Momentum Investment Consulting for the provision of model portfolio services for their clients, and firmly believes that these solutions will provide the optimal outcome when it comes to clients’investment needs. These Model Portfolios have been specifically designed to align with Rockfin’s financial planning and advisory process.

Outcome-based investing

Over the past 18 years, Momentum Investment Consulting has evolved to focus on building world-classoutcome-based investment solutions that align with clients’ unique objectives. All considerations – from mandate design, asset allocation, risk management, portfolio construction, structuring and reporting – are aimed at achieving clients’ goals. By creating a unique and sustainable investment proposition, MomentumInvestment Consulting aims to keep clients invested, thus creating a stress-free journey to get to their stated objectives. Six dedicated individuals collectively manage assets in excess of R3.2 billion and benefit from access to the Momentum Investment team, comprising of more than 80 local and international investment professionals.


Model portfolios provide a simple, cost effective means of appointing an expert Portfolio Manager to manage your portfolio. This is done in line with your investment objectives as identified by your financial advisor.Clients with a similar risk outlook and return objective are invested into a carefully selected range of investment options, which are specifically designed to cater for the needs of the group of clients in question.This collection of investment options is known as a Model Portfolio.

Expert Management

Your investment portfolio is managed by a qualified and highly experienced Portfolio Manager. The PortfolioManager applies their wealth of experience, quantitative and qualitative research skills to continuously monitor the risk and performance of your model portfolio investment, and to ensure that the optimal asset allocation and fund selection is implemented to achieve your identified investment objectives.

Rockfin has launched a 4 strategies initially namely a conservative , moderate , growth and flexible model strategies. Th portfolios are currently available exclusively to Rockfin clients on the Momentum Wealth , Allan Gray , Investec and soon Sanlam Glacier platforms.

This is a significant milestone for Rockfin and its clients as the practice grows from strength to strength.

See more at : https://rockfin.co.za/structured-model-portfolios/