As is the case with any business, ultimate commercial success can only be achieved if you know how best to maximise your income. Turning a profit through your enterprise is vital, of course, but learning how to make this money grow means that you can help it to increase even when it’s in your hands.
For B2Bs and B2Cs alike, wealth management professionals are some of the best people to impart such knowledge. Strange, then, the ignorance that continues to surround the topic. Many businesspeople fail to understand how exactly wealth management works, or even what it is.
Luckily, the concept is a simple one. Wealth management is a way to enhance your long-term wealth and financial standing through financial planning and money management, a feat usually achieved through three basic steps: financial management, investment planning, and estate planning.
Financial Management
As a rule, there are three main strands to wealth management, and professional wealth management companies usually offer all three under a single umbrella service. Perhaps the easiest of these for the layman to understand is financial planning.
Financial planning is, quite simply, learning how best to manage your finances, with the key goal being to consolidate and increase your wealth. This is achieved in two key ways: through budgeting, and through legally reducing the amount of tax you’re liable to pay. These goals can be achieved through many different methods, from working with the professionals to reduce your spending, to looking for means to enable you to pay smaller taxes.
Investment Planning
Whereas the aim of financial management is to reduce your expenditure and consolidate your wealth, the sole aim of investment planning is to increase the money in your account. Investments are an ideal way to do this, but placed in inexperienced hands they can have dire consequences. Wealth management companies remedy this by providing you with access to professionals who can either invest on your behalf, or offer you advice to steer your decision-making. As a rule, they’ll sit down and develop an investment strategy with you, bearing in mind your goals, and help to engineer a game plan that works in line with them to help build your wealth.
Estate Planning
The final strand of wealth management is known as estate planning. It is concerned with where your assets will go upon your death, with the main goal being to ensure that your wishes are carried out, whilst attracting the smallest possible tax burden. Rather than focusing on increasing your wealth, the intention is to preserve it, and make sure that it goes to your appointed successors as opposed to the government. Although some people find it morbid to consider, this is a truly useful tool for anyone with a substantial amount of wealth.
If you’re a B2B looking to maximise your profits, why not consider how wealth management could help you?
