Want to Know More About Wealth Management Fees? Here’s What Puai Wichman Has to Say
Wealth management is a financial service that caters to people with significant net worth and income. Often provided by financial institutions, wealth managers offer various services, including asset management, account handling, and other private client services. However, the complexity of the services bundled in a wealth management fee can be challenging to decipher. The fee schedule established between you and your wealth manager will determine what is included. Still, Puai Wichman says it is essential to understand that this fee may not encompass everything the wealth-management company can accomplish on your behalf. While a fee arrangement can help take the confusion out of your finances simultaneously, reading the fine print and understanding precisely what services and support you will receive are vital.
How do wealth management fees work?
While some may charge a flat fee, the most common approach involves charging a percentage of the assets under management. And it’s not a one-size-fits-all fee either – most managers have sliding scales that reduce the percentage charged as the client’s assets grow. For example, a client with $1 million in assets might pay around 1% per year, while one with $10 million could be charged closer to 0.7%. It’s important to remember that the fees charged by a wealth manager are just one aspect to consider when choosing the right one for you – but knowing how they’re calculated can be incredibly helpful.
Another factor to consider is whether a company charges a fixed annual fee rather than a percentage of managed assets. According to a recent survey, the average fixed annual fee for a $1 million client is $12,500, while those with $7.5 million or more can expect to pay around $55,000. These numbers align with the typical percentage range charged by companies that work on a percentage basis.
Puai Wichman notes that some companies offer their services at an hourly fee, which might seem like a downside at first glance. However, this way of working can be more cost-effective if your needs are relatively simple. For example, if you only need a few hours of assistance with a project, you won’t have to pay for a full package or deal with hidden fees. Hourly rates can give you flexibility and control over your budget, making it a viable option for those who need little help.
You’ll find that many companies are combining aspects of these models to give you the most comprehensive financial planning services possible. Finding one that aligns with your values and financial goals is important when looking for a wealth management firm.
Getting your money’s worth
Regarding wealth management, it’s important to understand that the term goes far beyond simply managing one’s finances. Great wealth-management companies build strong relationships with their clients, taking the time to become fully aware of their issues and concerns. These companies offer advice that extends far beyond financial matters, helping high-net-worth families to navigate the complexities of their daily lives. However, Puai Wichman points out that it’s essential to ensure that you’re getting what you pay for when it comes to wealth management services. Fee schedules are a good place to start, but the service quality will make or break the relationship. The right wealth-management company will give you peace of mind and the confidence you need to feel secure with your finances, making it well worth the compensation.
Puai Wichman is the founder and CEO of Ora Partners, an international trust provider and wealth management firm dedicated to helping families and individuals protect personal and corporate wealth.