Chapter 21Investment Management

As the term wealth management has become mainstream, more firms are moving toward a model that asks clients about life goals, liabilities, work, family, and spending patterns as a way to increase value. Managing money is just one part of the much bigger picture—although certainly it's a very significant part. The term wealth management was first used in 1933 and has become popular in the last 25 years. As more and more firms have started to focus on broader relationships, planning has become core just as portfolio construction. By standard definition, wealth management means serving the high‐net‐worth market, but everyone has their own definition of what wealth management means. The four stages to wealth management are wealth accumulation, wealth planning, wealth preservation, and wealth transfer. The big pillars of these stages are the risk tolerance of the client, time horizon, the risk/reward aspect of each asset class, tax efficiency, and how each component fits with the overall plan. Wealth management and investment management are not interchangeable.

Future clients will have more options on how they invest. They will have a number of choices: do‐it‐yourself robo, robo‐assisted, advisor, and life advisor team.

Hindsight, as they say, is 20/20. I have witnessed and felt the anxiety of many market corrections. My first was the 1987 crash, followed by the technology bubble in 2000, the liquidity crisis that began in 2007, and the deep recession ...

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