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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]
Norman
Norman /ˈnɔːrmən/ is a city in the U.S. state of Oklahoma 20 miles (30 km) south of downtown Oklahoma City in its metropolitan area. The population was 110,925 at the 2010 census.[1] Norman’s estimated population of 120,284 in 2015 makes it the third-largest city in Oklahoma, and the city serves as the county seat of Cleveland County.
Norman was settled during the Land Run of 1889, which opened the former Unassigned Lands of Indian Territory to American pioneer settlement. The city was named in honor of Abner Norman, the area’s initial land surveyor, and was formally incorporated on May 13, 1891. Economically the city has prominent higher education and related research industries, as it is the home to the University of Oklahoma, the largest university in the state, with approximately 30,000 students enrolled. The university is well known for its sporting events by teams under the banner of the nickname “Sooners,” with over 80,000 people routinely attending football games. The university is home to several museums, including the Fred Jones Jr. Museum of Art, which contains the largest collection of French Impressionist art ever given to an American university, as well as the Sam Noble Oklahoma Museum of Natural History.
The National Weather Center, located in Norman, houses a unique collection of university, state, federal, and private sector organizations that work together to improve the understanding of events related to the Earth’s atmosphere. Norman lies within Tornado Alley, a geographic region where tornadic activity is particularly frequent and intense. The Oklahoma City metropolitan area, including Norman, is the most tornado-prone area in the world. The Storm Prediction Center (SPC), a branch of the National Oceanic and Atmospheric Administration (NOAA) is located at the NWC. SPC forecasts severe storm and tornado outbreaks nationwide. Additionally, research is conducted at the co-located National Severe Storms Laboratory (NSSL), which includes field research and operates various experimental weather radars.
In 2008, CNN‘s Money Magazine ranked Norman as the sixth best small city within the United States to live in.