Asset management might be your service if you want to grow your wealth. Puai Wichman explains that an asset manager is an investment advisor who manages your investment portfolio to help you meet your financial goals. They can go by various names, including financial advisor, registered investment advisor, robo-advisor, or investment broker. Asset managers can work alone or as part of a larger company specializing in asset management. It’s not just for the wealthy, either. Anyone who wants to start or optimize their investment portfolio can work with an asset manager. It’s important to note that not all asset managers are fiduciaries, meaning they may not be required to keep your best interests in mind. So, before signing up, check their fiduciary status and ensure they have your best interests at heart.
Managing money isn’t always easy and can become even more complicated as your net worth grows. It is where wealth management can come into play. A wealth manager specializes in working with clients with high net worth and offers advice on financial aspects beyond physical assets. From saving for retirement and tax planning to insurance protection, estate planning, and trust management, wealth managers have tailored expertise to cater to the complex needs of their clients. Puai Wichman notes that a wealth manager will likely be a fiduciary, but it’s always best to confirm before signing on. A wealth manager can be invaluable for those navigating the complexities of managing their ever-growing wealth.
What is a fiduciary?
If someone has ever entrusted you with their well-being without hesitation, you know the power of being a fiduciary. A fiduciary is a person or organization that acts on behalf of another person or persons with a duty to preserve good faith and trust. They put their client’s interests first, meaning they must act legally and ethically in their best interests. It often involves finances, such as managing the assets of a person or group. Money managers, financial advisors, bankers, insurance agents, accountants, executors, board members, and corporate officers all have fiduciary responsibilities.
Understanding the Fiduciary Relationship Between a Trustee and Beneficiary
It’s important to know the roles of the trustee and beneficiary regarding estate arrangements and trusts. Puai Wichman mentions that the trustee is the individual tasked with managing the property or assets on behalf of the beneficiary, who is the principal. In other words, the trustee has legal ownership and control over the assets in the trust. It’s crucial to note that the trustee must act in the best interest of the beneficiary, who holds equitable title to the property. This trustee/beneficiary relationship plays a vital role in comprehensive estate planning, so careful thought should be put into who the trustee is.
Politicians commonly use blind trusts to avoid any potential conflicts of interest. In a blind trust, the trustee handles all the investment decisions for the beneficiary’s assets, while the beneficiary is unaware of how the assets are being invested. However, the trustee is still bound by a fiduciary duty to invest the assets responsibly, following the prudent person’s standard of conduct. Understanding the fiduciary relationship between a trustee and beneficiary is essential for effective estate planning and mitigating conflicts of interest.
Puai Wichman is the founder and CEO of Ora Partners, an international trust provider and wealth management firm dedicated to helping families and individuals protect personal and corporate wealth.
