Wealth Management

Young adults should begin to build a well-diversified portfolio of the major asset classes that include mutual funds or exchange traded funds (ETFs) that cover major indices of domestic and foreign stocks and fixed income securities. The portfolio should be rebalanced on a recurring periodic basis so that it continues to align with investor’s risk tolerance and investment style.

A fiduciary standard is a legal and ethical requirement on the part of registered investment advisors to put the financial interests of their clients above their own. This means that financial advisors can not sell or otherwise steer client investments toward commissioned-based investments that might be in their own financial interests unless they can prove they would be of primary benefit to the client.

Some common complaints expressed by investors concerning their financial advisors include that they only promote investment products that benefit themselves through high commissions, promising unrealistic investment returns, not providing enough information about what they sell and not being responsive to client inquiries. As more financial advisors adhere to fiduciary standards these types of complaints should become less common, however.

Wealth management generally refers to financial advisory and investment management services for high net worth individuals. Private banking is offered by commercial banking institutions and also offers investment advisory and management services that also includes dedicated banking and trust management services tailored to high net worth individuals.

Managing wealth during economic downturns generally entails strategies to preserve capital through shifting investments toward fixed income and other asset classes that tend to be negatively correlated with equities. Within equity investments certain sectors of the economy also tend to outperform others such as utilities, industrial goods and defense stocks. Wealth management services can be particularly valuable during recessionary periods as their down-market strategies are often more sophisticated than self-directed individual investors can plan and execute.