Wealth Management
Author Vansh Nimkar
Support and empower women in financial planning
Trujillo Limón, A. (2024) stated that the study on the state of women in wealth management utilized mixed-methods, incorporating quantitative and qualitative analyses based on responses from 276 financial advice professionals, with 84% women, 14% men, and 1% unidentified. The average respondent age was 48, with an average industry tenure of 19 years. The study acknowledged limitations such as not addressing intersectionality and a small sample size. Future studies plan to address these shortcomings. Action based on study results is crucial for retaining women in the profession, as it helps lower barriers and promotes diversity and inclusion. Addressing gender disparities in wealth management is not only financially beneficial but also a matter of social justice, aiming to provide equal opportunities for all individuals in the industry. The status of women in wealth management, addressing prevalent challenges such as underrepresentation, discrimination, and insufficient sponsorship. It emphasizes that women possess essential skills for success in financial planning. Key insights from the study include the critical role of sponsorship, the pervasive issue of sexism within the industry, and the necessity of fostering improved firm cultures to support and empower women in financial planning roles.
Three Most Important Trends in Wealth Management
HEYE (2022) state that the article delves into important trends in wealth management, particularly addressing the intersection of financial services with access to quality medical care. It discusses the decentralization and democratization of the financial sector, presenting it as a safeguard against activist and corrupt governments. Additionally, it explores the impact of cryptocurrency markets on financial decision-making in executing transactions. However, the article emphasizes another significant trend overshadowing ESG and cryptocurrency: the growing prevalence of cognitive decline among older adults. With approximately 30% of individuals over 65 suffering from dementia or mild cognitive impairment (MCI), and this number increasing as the population ages, wealth managers and their clients face notable challenges. Cognitive decline poses risks such as poor financial decision-making and susceptibility to financial exploitation, necessitating proactive strategies to address these concerns within wealth management practices.
Artificial Intelligence a Key success Factor for Wealth Management
DZHAPAROV (2022) state that the Private Banking & Wealth Management (PWM) industry, known for its traditional values and personalized client interactions, faces challenges in meeting the demands of today’s fast-paced, digitally connected world. High Net Worth Individuals (HNWIs) increasingly seek faster, more convenient, and technologically advanced services, a trend accelerated by the COVID-19 pandemic. To adapt to these evolving client expectations, private banks and other institutions are investing in new technologies, with artificial intelligence (AI) playing a prominent role. AI not only enhances user satisfaction but also offers benefits in areas such as risk management, compliance, and cost reduction. This shift towards digitalization reflects the industry’s efforts to modernize and remain competitive in a rapidly changing landscape.
Wealth Management rapidly increase among Women Investors
SOLOMON (2019) state that the paper discusses the increasing trend of women taking on the responsibility of managing and accumulating family wealth in both developed and developing countries. It emphasizes the need for wealth advisors and managers to offer tailored investment opportunities specifically designed for women investors, aiming to foster gender inclusivity in a traditionally male-dominated field. Through the analysis of exogenous factors influencing women’s wealth investment decisions, the paper aims to provide insights for wealth managers to better serve this growing segment of investors. Primary data collected from 250 respondents, including professionals, housewives, and self-employed women aged 30 to 65, sheds light on their preferences, personal goals, investment decision-making processes, and considerations when choosing wealth managers or advisors. Ultimately, the paper offers recommendations to bridge the gap in experience and improve connections between wealth managers and women investors, thereby enhancing the level of service and engagement in this important and rapidly expanding market segment.
Wealth Management strategies tailored for individuals in retirement
Pang, G., & Warshawsky, M. J. (2009) state that this article examines various wealth management strategies tailored for individuals in retirement, with a focus on balancing wealth creation and income security. It compares six distinct strategies, including systematic withdrawal from mutual funds, fixed payout immediate life annuity, immediate variable annuity for life, variable annuity plus guaranteed minimum withdrawal benefit (VA+GMWB), combinations of mutual fund withdrawals and fixed payout immediate life annuity, and gradual annuitization using mutual fund withdrawals and fixed payout life annuity. Each strategy presents trade-offs between potential wealth accumulation and income stability. For instance, systematic withdrawals from mutual funds offer greater wealth creation opportunities but come with the risk of significant investment losses and income shortages. On the other hand, fixed and variable life annuities provide steady incomes but may not consider bequest preferences. The VA+GMWB option attempts to balance income needs and wealth preservation, while combinations of mutual funds and fixed life annuities offer flexibility similar to VA+GMWB but with potential enhancements. It emphasizes the importance of understanding contract terms, as fees and charges significantly impact wealth creation and income levels. Additionally, it suggests segmenting wealth to ensure minimum necessary consumption and mitigate longevity risk, while optimizing portfolios to leverage benefits from defined benefit plans and Social Security. Ultimately, the article concludes that no single strategy dominates, highlighting the importance of tailoring approaches based on individual circumstances and goals.
Financial behavioural and recent developments in wealth management
Evensky, H., & Tao Gou. (2017) state that the article provides insights into recent developments in wealth management and behavioural finance up to September 2017. It highlights several key topics, including the evolving demographics of ultra-high net worth clients, who are described as younger and more sophisticated compared to previous generations. Additionally, it notes the continuous expansion of the female client base in the wealth management services sector. Furthermore, the article discusses a report from the “Financial Analysts Journal” addressing pricing inefficiencies associated with exchange-traded funds (ETFs). Overall, the article sheds light on important trends and challenges within the wealth management industry and offers perspectives on emerging opportunities and areas of focus for financial professionals.
Women’s participation in professional roles in United States
Stat Bank (2015) state that the article presents wealth management statistics in the United States as of February 2015. It highlights key figures, including the percentage of American families with some form of debt, which stands at 74.5%. Additionally, it notes that 51% of working women are in management or professional occupations. Furthermore, the article mentions that Social Security has been distributing checks for 77 years. These statistics provide insights into various aspects of wealth management, including debt levels among families, women’s participation in professional roles, and the longevity of the Social Security program in the U.S.
Different Financial Goals with different Age Groups
Different Generations, Different Financial Goals (2009) state that the article discusses survey findings regarding the financial goals of young adults and parents in the United States, as conducted by Wells Fargo & Co. It highlights the top three financial goals identified by young adults, which include purchasing a car, buying a house, and securing employment. In contrast, parents prioritize goals such as finding a job, paying off student loans, and managing credit card debt. The survey reveals a knowledge gap between the two generations concerning money management, emphasizing the need for additional financial education. Overall, the article underscores the importance of bridging this gap to empower both young adults and parents to make informed financial decisions and achieve their goals effectively.
How to Manage Wealth
DENNIS (1997) state that the article provides insights into Kaycee Krysty and her firm, Tyee Asset Strategies Inc., based in Seattle, Washington, which specializes in wealth management and investment consulting. Tyee primarily serves clients with significant liquid assets, often individuals who have sold a business, taken a company public, or accumulated substantial stock options. While clients may have investments in various assets like their own companies or real estate, Tyee focuses on managing their traditional financial assets. Krysty brings 20 years of experience in public practice, particularly working with high net worth clients, and has also provided consulting services to other CPA firms on their Personal Financial Planning (PFP) practices. Notably, the firm benefits from a four-person advisory board comprised of clients and long-term business contacts, which meets quarterly to review the firm’s financial information and provide valuable advice and feedback. This advisory board serves as a crucial asset for Tyee, contributing to its strategic decision-making processes and ensuring alignment with client needs and expectations.
Growing number of Wealthy Investors are Embracing the Financial Planning Process
Bear Market Makes Wealthy Investors Bullish on Financial Planning (2009) state that the article highlights findings from the 2009 Phoenix Wealth Survey conducted by Phoenix Companies Inc. in the United States. It underscores that a growing number of wealthy investors are embracing the financial planning process, with 39% reporting that they have a formal written financial plan in place. Additionally, the survey indicates a notable trend of wealthy investors re-engaging with financial advisors, signaling a renewed trust and reliance on professional financial guidance. This shift suggests a recognition among affluent individuals of the importance of comprehensive financial planning and the value of expert advice in navigating complex financial landscapes.
Over All Summary
The summaries provided cover various aspects of wealth management, financial planning, and investment strategies. They encompass topics such as the state of women in wealth management, trends in wealth management, the role of artificial intelligence in the industry, the increasing participation of women in wealth management, retirement wealth management strategies, recent developments in wealth management and behavioural finance, wealth management statistics, financial goals of different age groups, managing wealth, and the growing number of wealthy investors embracing financial planning.
Each summary offers insights into different facets of wealth management and financial planning, providing valuable information on industry trends, challenges, and strategies for individuals and organizations involved in managing wealth and providing financial advice. These summaries collectively offer a comprehensive overview of the wealth management landscape and highlight the importance of adapting to evolving market dynamics, leveraging technology, and addressing the diverse needs and goals of clients.
References
Bear Market Makes Wealthy Investors Bullish on Financial Planning .. (2009). Journal of Financial Planning, 22(8), 11. https://research.ebsco.com/linkprocessor/plink?id=81458fe1-5842-324f-8e1b-e775ad649206.
Dennis, A. (1997). Managing wealth. Journal of Accountancy, 183(5), 84–87. https://research.ebsco.com/linkprocessor/plink?id=4786e92f-6195-3760-9453-a62fc46ad16b.
Different Generations, Different Financial Goals .. (2009). Journal of Financial Planning, 22(8), 12. https://research.ebsco.com/linkprocessor/plink?id=3ca9eecd-8864-310a-9226-47e37dbbdc5d.
Dzhaparov, P. (2022). Artificial Intelligence – a Key Success Factor for Wealth Management Industry. Izesstia, Journal of the Union of Scientists – Varna, Economic Sciences Series, 11(2), 97–104. https://research.ebsco.com/linkprocessor/plink?id=7d86caf1-692d-30d4-b3a0-44b6b2d5f899.
Evensky, H., & Tao Gou. (2017). New Research on Wealth Management and Behavioral Finance Deserves Your Attention. Journal of Financial Planning, 30(9), 36–37. https://research.ebsco.com/linkprocessor/plink?id=be5e474a-6041-3488-adcc-e2e4939a0ba1.
Heye, C. (2022). The Three Most Important Trends in Wealth Management: Crypto and ESG get lots of headlines, but they might be distracting us from what’s really important. Journal of Financial Planning, 35(11), 46–50. https://research.ebsco.com/linkprocessor/plink?id=c09dc0f6-82cb-377d-927a-2e6a6f161f8a.
Pang, G., & Warshawsky, M. J. (2009). Comparing Strategies for Retirement Wealth Management: Mutual Funds and Annuities. Journal of Financial Planning, 22(8), 36–47. https://research.ebsco.com/linkprocessor/plink?id=d72082ac-1a12-33bc-ade5-d3516abb5dbe.
Solomon, P. (2019). Wealth Management for Women Investors: The Indian Context. IUP Journal of Management Research, 18(1), 24–35. https://research.ebsco.com/linkprocessor/plink?id=fc0e040c-f5a2-3134-9ea5-a92b7539e10a.
Stat Bank. (2015). Journal of Financial Planning, 28(2), 11. https://research.ebsco.com/linkprocessor/plink?id=69197db4-ab6c-3693-a762-b3ea3e4bf262.
Trujillo Limón, A. (2024). Assessing Where We Are for a Brighter Future: Three Key Insights from a Women in Wealth Management Study: Women possess a number of skills vital to success as financial planners. Journal of Financial Planning, 37(2), 38–41. https://research.ebsco.com/linkprocessor/plink?id=79598031-4c89-338f-b576-b6a5b149a803.