What is a Wealth Group?

A wealth group or wealth management group is a company composed of financial advisers who often work exclusively with affluent individuals and families to deliver financial and related services. The clients of wealth management groups have a high net worth, which often means the client is considered a millionaire or billionaire. Wealth groups offer general and specialized services to enable them to preserve and to grow their wealth. Some of the services include estate planning, tax planning and preparation, and business succession planning. Many wealth groups also help their clients set up charitable foundations and implement charitable donations to existing institutions.

The compensation options for services provided by a wealth group are fee based, commission based, or both. Some advisers collect a commission on the investment product they recommend, which is also referred to as a kickback. Clients are sometimes skeptical of this compensation method, because they feel that their advisers may be tainted by the commission and are not able to provide an unbiased recommendation on investment and other financial products. Other advisers charge a fee periodically for managing the assets and for providing services, such as tax planning and preparation. There are often disclaimers of the compensation method on the website or in contracts, including whether there are annual fees for accounts or fees for inactive accounts.

Business continuity, whether after the owner becomes disabled or mentally incapacitated or after the owner’s death, is a primary concern to many high net worth individuals. A wealth group often has specialists to assist with business planning. Some of the services include acquiring or selling businesses and business assets, purchasing the appropriate business insurance, and succession planning for children and others to take over the business in the future. Financial advisers also work with attorneys, such as employment law attorneys, to help clients remain compliant in their businesses with current and future government regulations. Advisers also recommend products for employee benefit packages, such as group health plans and pension plans.

Charitable planning is another service that a wealth group may offer to clients. Individuals may need help identifying and donating to private and public organizations. Advisers in the group are often able to provide services to clients to help them meet their charitable goals. For example, a client may wish to form a foundation to accomplish a specific social mission and with a board of directors that will have family members throughout the generations. Advisers will often work with the legal and tax professional necessary to help create the foundation and put strategies in place on behalf of the client.