Chartered wealth manager

Chartered Wealth Manager is a person specializing in professional wealth management (A. Mirza 2016, pp. 1-4). This title is awarded by the Global Academy of Finance and Management (GAFM), formally the American Academy of Financial Management (AAFM). In order to obtain it, it is necessary to obtain professional competence in management and financial consulting, as well as a degree in the fields of marketing management, finance, financial mathematics, tax law, balance sheet law and general economy (A. Mirza 2016, pp. 1-4). A certified chartered wealth manager has at least five years of experience in financial advisory and comprehensive wealth management of his clients (A. Mirza 2016, pp. 1-4). The main objective of the chartered wealth manager t is to maintain the value of the managed property in the long term, to multiply it safely and to transfer it to the heirs in the most beneficial way from the financial point of view (A. Mirza 2016, pp. 1-4).

Requirement

Candidates for the position of chartered wealth manager must meet a number of formal requirements, which include not only the level of competence and professional qualifications, but also the degree, work experience and training received and licences and certificates held. The most important requirements for a candidate for a position as a chartered wealth manager include (M. Stone, 2002, pp. 84-97):

1. A minimum of three years' professional experience in the relevant sectors:

• Spatial planning,
• Administration,
• Property management,
• Finance and accounting,
• Marketing, financial mathematics,
• Trust funds,
• Portfolio and asset management,
• Investments,
• Taxes,
• Banking,
• Insurance,
• Strategic management
• Risk management,
• Communication,
• Human capital management,
• Public relations management,
• Pension funds,
• Credit facilities,
• Business science,
• Economic law.

1. Obtaining a degree or diploma in one of the above fields of study, a licence or a professional certificate recognised by the government (M. Stone, 2002, pp. 84-97)
2. Have attended thematic or online training courses of at least 15 hours per year
3. Present all his/her qualifications, documents, certificates, diplomas, certificates and licence (M. Stone, 2002, pp. 84-97).

Scope of services

The basic services provided by Chartered Wealth Manager include (P. Chowney, E. Fragnière 2014, pp. 3-7):

• asset management and related financial advice,
• investment management and financial consulting,
• accounting/tax services,
• heritage planning,
• serwis concierge.

Asset management and related financial advice must be in line with the expectations and preferences of the client, tailored strictly to his needs, although not necessarily risk-taking (P. Chowney, E. Fragnière 2014, pp. 3-7). As it is emphasised, assets, especially their financial part, should not be subject to speculation. This is because it is of a short-term nature, bears a high or very high investment risk and may lead to high negative rates of return, which in turn may contribute to the loss of significant value of assets and thus the status of a wealthy or rich person (P. Chowney, E. Fragnière 2014, pp. 3-7). The wealth management advisors want to avoid such a situation at all costs - even if the client is attracted to risky plays, they try to dissuade him from such investments or at least limit his involvement in risky instruments to e.g. 10-20% of the value of the investment portfolio (P. Chowney, E. Fragnière 2014, pp. 3-7).

Every client of chartered wealth management has a personal wealth manager. For the purpose of comprehensive and professional customer service, his assets are divided into financial and non-financial assets, and then transferred to management teams of advisors specifically appointed for this purpose. The financial part of the assets, depending on their structure, is divided and directed to the following teams of people (P. Chowney, E. Fragnière 2014, pp. 3-7):

• wealth planners, wealth strategists, who advise clients on short and long term asset multiplication and propose groups of instruments or products that a client should be interested in (e.g. stock exchange instruments, investment funds, modern investments, etc.);
• investment brokers who manage the direct investments of clients on the capital market (both public and private);
• investment managers and advisors, dealing mainly with the creation of individual portfolios and indirect investments in investment funds (traditional and modern).

The non-financial part of the assets is handled by persons or teams of advisors who specialise in such assets and have contact with a given market (W.W. Jennings, et all., pp.8-14) . For example, client real estate will be taken care of by real estate professionals, while luxury goods will be taken care of by people with contacts and knowledge of the market for yachts, airplanes, old cars, etc. The financial assets will be taken care of by people who specialise in such assets and have contact with the market (W.W. Jennings, et all., pp. 8-14).

Wealth management can also be defined as a combination of investment consultation, advanced planning and relationship management. Investment advice is considered to be the core of wealth management services and is the starting point for wealthy client relationships. Advanced planning focuses on the most important decision areas of wealth management clients, and is one of them: This includes "growth, capital transfer and protection, as well as charitable donations" (W.W. Jennings, et all., pp.8-14) . Relationship management focuses on a thorough "understanding of the critical needs of the client" and their planning over time, on maintaining contacts between the wealth manager and a group of financial experts, and on the joint work of other advisors (accountants, lawyers) with the client (W.W. Jennings, et all., pp. 8-14).

Use of chartered wealth manager services

The aforementioned method of wealth management began to develop in the 1990s, especially in the USA. Currently, people in the position of chartered wealth manager mainly provide services related to (R.J. Sullivan, K. Spon, 2005, pp. 34-37):

• private banking,
• asset management and investment consulting in a similar scope,
• financial engineering and asset planning, in particular tax and inheritance planning,
• private equity, venture capital and alternative funds, including hedge funds,
• insurance planning,
• non-financial advice, real estate, investments in works of art and other so-called emotional investments.

In addition, the chartered wealth manager acts as a comprehensive personal financial guardian for the individual client. To this end, he monitors the markets for the client and warns him about new opportunities or potential threats that may affect his finances (R.J. Sullivan, K. Spon, 2005, pp. 34-37).

Advantages of Chartered wealth manager

A Chartered Wealth Manager provides a range of advantages:

• They use their expertise and experience to help clients make the best financial decisions, based on the individual’s financial goals and objectives.
• They are knowledgeable in a variety of areas, such as taxes, investments, estate planning, and risk management, and can provide comprehensive advice on all aspects of financial planning.
• They are able to provide guidance and support in the development of a comprehensive financial plan that includes strategies for retirement, savings, and other aspects of long-term financial security.
• They can help clients manage their risk to ensure that their wealth is protected from losses due to unforeseen events.
• They are also able to provide advice on tax planning and asset allocation in order to maximize the client’s return on investments.
• They are also able to provide their services on a fee-only basis, ensuring that the client’s interests are always prioritized.

Limitations of Chartered wealth manager

A Chartered Wealth Manager is a professional with a great amount of expertise in the fields of wealth management and financial consulting, however they are not without limitations. The following are some of the limitations of Chartered Wealth Managers:

• Chartered Wealth Managers do not have the power to make financial decisions on behalf of their clients. They can only provide advice and make recommendations.
• Chartered Wealth Managers are not authorized to advise on legal and tax matters.
• Chartered Wealth Managers cannot provide investment advice that is tailored to the specific financial needs of their clients.
• Chartered Wealth Managers are not responsible for managing their clients' investments or for conducting any transactions on their behalf.
• Chartered Wealth Managers are not qualified to provide investment advice for high-risk investments, such as commodities and derivatives.
• Chartered Wealth Managers are not authorized to provide advice on insurance products or estate planning.
• Chartered Wealth Managers do not have any control over the performance of their clients' investments, and thus, cannot guarantee the return of any investments.

Overall, Chartered Wealth Managers are highly qualified professionals with a great deal of expertise in the field of wealth management and financial consulting, but they are subject to certain limitations that should be taken into consideration when seeking advice.

Other approaches related to Chartered wealth manager

In addition to professional competence and experience in wealth management, a chartered wealth manager also has to demonstrate several other approaches in order to be successful in this field. These approaches include:

• Comprehensive financial planning: A chartered wealth manager must have an in-depth knowledge of the financial markets and be able to develop sound financial plans for their clients. They must be able to evaluate the current financial situation and develop strategies to protect and grow their clients’ wealth.
• Investment management: A chartered wealth manager must be able to manage the investments of their clients in order to optimize their returns. This includes selecting suitable investments, monitoring their performance, and rebalancing the portfolio as needed.
• Tax planning: A chartered wealth manager must be able to provide tax advice to their clients, including the use of strategies to minimize their tax burden.
• Estate planning: A chartered wealth manager must be able to help their clients plan for their long-term financial security by creating a comprehensive estate plan. This includes creating wills, trusts, and other documents to ensure the efficient transfer of wealth to the next generation.

In summary, a chartered wealth manager must demonstrate a comprehensive knowledge of financial planning, investment management, tax planning, and estate planning in order to be successful in this field.

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References

• Chowney P., Fragnière E. (2014). Regaining Loyalty in Wealth Management: An Empirical Behavioural Inquiry in the Geneva Private Banking Sector "International Journal of Social Science and Humanity", Vol. 4, No. 4.
• Jennings W.W., Horan S.M., Reichenstein W., Brunel J.L.P. (2011). Perspectives from the Literature of Private Wealth Management, "The Journal of Wealth Management" 14(1).
• Mirza A. (2016). Case Study on Wealth Management, "Financial Planning" 12(1).
• Stone M. (2002). Managing wealth: A new approach in the U.K, "Journal of Financial Services Marketing", Vol 6(1).
• Sullivan R.J., Spon K.(2005). How does ownership structure and manager wealth influence risk?: a look at ownership structure, manager wealth, and risk in commercial banks, "FINANCIAL INDUSTRY PERSPECTIVES" Vol 6 (1).

Author: Karolina Szlachtun