It takes a long time, usually decades, for individuals to amass wealth. You accumulate a large corpus by making strategic investments and being prudent with your finances or benefitting from a large inheritance. However, preserving the corpus or growing its value requires even greater effort owing to the rising cost of living and inflation.

Typically, Indians turn to banks and NBFCs to open a fixed deposit for capital preservation. However, today’s economy warrants more active investor participation. This is where wealth management comes into the picture.

What is wealth management

Wealth management is an investment advisory service offered by individuals or institutions, providing extensive financial planning and management services. Such services are typically offered to high-networth individuals, but they can be requested by anyone with a sizable corpus requiring investment advice from experts. 

In essence, through wealth management, individuals can enjoy financial stability and protect their assets for future generations. Wealth management also focuses on optimising investor’s wealth, which includes managing investments, insurance policies, cash flow, and estate and retirement planning, among other financial aspects.

Significance of wealth management in today’s economy

The rising inflation, combined with the surging cost of living, demands individuals be judicious with their corpus. Whether you are planning to purchase something as simple as a gadget from an online marketplace or thinking about investing in an asset, it is crucial that you make informed financial decisions. Qualified wealth managers help you choose the right financial assets while dealing with complicated matters, such as legal considerations and risks attached to investments.

Here are a few reasons why it is imperative for HNIs to get the help of experienced wealth managers:

Less financial stress

With wealth accumulation comes the stress of managing finances. Wealth management firms (or wealth managers) help by guiding their clients in making the right investment decisions. Depending on their financial goals, wealth managers chart a financial map, identify the potential pitfalls and opportunities, and help individuals in attaining their long-term objectives.

Retirement planning

Wealth management also entails planning for life after retirement. Wealth management firms or managers help you understand how to generate passive income, so you can rely on different revenue streams. A few such investments that generate passive income include mutual funds and retirement accounts, which help secure your financial future and provide income post-retirement. 

Devising a systematic financial plan

A systematic financial plan acts as a roadmap for your future. Wealth managers assess their client’s financial situation and create a financial plan to help them achieve their financial objectives. Such a plan is comprehensive and comprises all aspects of investing, including retirement planning and estate planning.

Charting investment strategies

To grow your corpus, your investment returns should not only beat inflation but also offer significant returns. For this reason, wealth managers create comprehensive investment plans, with a healthy mix of equity and debt securities. Such investments include bonds, stocks, and mutual funds. Wealth managers assess their client’s risk tolerance levels, financial situation, and risk capacities before recommending investment options.

Securing your family’s financial future

Another important aspect of wealth management is providing financial security for one’s family. Wealth management firms suggest insurance plans, savings accounts, retirement plans, and investments that provide long-term stability to the clients and their families. Wealth managers also come up with strategies to pass on the wealth to the next generation without fretting about the legalities involved.

Conclusion

It takes years for an individual to accumulate sizable wealth. However, it is important to protect—and grow the corpus. For this purpose, individuals (HNIs or otherwise) turn to wealth management firms and wealth managers, who help create financial strategies according to their client’s financial goals. With the rising cost of living and sustained increase in the price of goods and services, wealth managers guide individuals in their investment journeys to grow their corpus and secure their family’s financial future.

Disclaimer:

This article contains sponsored content that may not reflect the independent opinion or views of FinancialExpress.com. Further, FinancialExpress.com cannot be held responsible for the accuracy of any information presented here. Please consult a certified financial advisor before making any decisions based on this article.