Wealth Management Formula

Many financial advisors and their firms claim to offer what they call “wealth management.” However, all too often, the real focus of their activity is facilitating the sale of investment products that may not be right for you. Lacking a professional financial planning approach, most such financial advisors don’t recognize many of the major concerns of affluent individuals and families if they are not somehow connected to products their firms sell. But there is a better way.


The consultative wealth management process is an integrated series of steps that brings an elegant clarity, focus and simplicity to often highly complicated financial circumstances of many affluent families. For many, “wealth” extends into human, intellectual and social factors expressing their deepest values. To understand whether you are getting help with what matters most, consider this formula used by some elite wealth advisors to explain what wealth management should cover:

WM = IP + AP + RM

Wealth Management = Investment Planning + Advanced Planning + Relationship Management

Investment Planning is the foundation of wealth management—making smart decisions about money and the consistent positioning of investment and real estate interests over time, depending on a family’s needs, situation, and risk preferences.

Advanced Planning coordinates planning that may be only indirectly related to investment management. For example, income tax planning and estate tax planning are needed by many affluent clients, but ignored by most financial advisors.

Relationship Management is the third element of the wealth management formula. To address affluent clients’ interconnected concerns, wealth managers must have three sets of professional relationships:

  • Trusted relationships with clients.
  • A strong network of specialized advanced planning professionals they can invite case-by-case
  • Ability to work effectively with clients’ existing professional advisors, whether attorneys, accountants or insurance specialists.