Using wealth management enables you to evaluate where you are now, where you want to get to financially in the future and how you can achieve your goals. The strategy of how to achieve these goals is constructed through collecting the relevant information, setting life objectives (such as paying school fees, buying an overseas property or having sufficient income in retirement) and then how they can be achieved with your current level of income, expenditure and the amount of investment risk you are prepared to take, including ethical considerations. Effectively, it is about drawing up a balance sheet of all your financial affairs.

The benefit of wealth management is that it can provide a strategy for your financial affairs. It highlights how each decision can affect another area of your finances and how they affect the possibility of you meeting your lifetime goals. For example, an investment may potentially impact on your tax liabilities. As major events occur in life, such as getting married, having children, getting divorced and being promoted, so having a balance sheet of your financial affairs enables you to cope better.

For a successful relationship, you have to trust your wealth manager implicitly and there has to be chemistry between you. To create and manage a balance sheet of your finances requires you to provide many personal details. These not only include information about your wealth, but also details about your family and even the state of your marriage.

There are numerous examples, however, of how people do not receive comprehensive wealth management but are sold products by what are effectively salesmen. This is why we refer to “should” so often in this chapter. Just because individuals or institutions are called wealth managers does not mean they provide comprehensive financial planning. Products, such as pensions and funds, should be tools to aid the achievement of your financial goals rather than the objective in themselves.

The following is an example of how clients may not receive comprehensive advice. In June 2005, a client went to see his independent financial adviser (IFA). It had been five years since the last and only time that the two had met, which had been when the IFA had advised the client to buy a personal pension and an individual savings account (ISA).

In the intervening five years, there had been no contact from the IFA. In June, the client had expressed concern about the cost of the personal pension he had taken out and decided to freeze new premiums. The IFA was indifferent to the client’s circumstances until the latter mentioned his salary had risen by 300% since they had last met. The IFA instantly sparked into life and talked about the need to buy some investment funds.

The actions of this particular IFA may not be typical of the service provided by professional advisers but the emphasis on product selling in this example is not rare. Those advisers who are paid commissions have a financial incentive to get in touch when there is a chance that a product will be purchased.

This book is designed to take you through the wealth management process and financial planning that are offered by wealth managers. By reading this book, we hope to assist you in finding and evaluating wealth managers and in knowing the questions to ask them. The different types of wealth managers, who are covered in chapter two, include private banks, IFAs, family offices, stockbrokers, trust companies and discretionary asset managers.

You can carry out wealth management yourself but this may not be ideal for a number of reasons. The co-ordination of all your financial affairs requires time and resources. This is without considering the fact that areas such as tax and succession planning can be highly complex and change regularly. As it becomes more common for children and grandchildren to move overseas and for people to buy property abroad so the financial and tax planning required becomes even more sophisticated. Not only do you need to know the tax implications in the UK of owning a property in France, for instance, but you also have to be aware of the local taxes in France and how these may be mitigated. As well as capital gains and income taxes, these could include local inheritance and wealth taxes. This will typically require the services of a private client lawyer.

Gaining greater knowledge about financial planning and how the financial services industry works should help you to find a suitable wealth manager to meet your lifetime needs.