What is Personal Wealth Management? Types and Purpose

financialtreat – will explain about What is Personal Wealth Management? Types and Purpose which you will get in the following article. let’s look at this article carefully!

Personal wealth management is an investment consulting practice that combines financial planning, portfolio management, and other combined financial services for individuals, as opposed to companies, trusts, funds, or other institutional investors.

From the client’s perspective, personal wealth management is the practice of breaking or raising their financial atmosphere and achieving short, medium, and long-term financial goals by providing financial advisors.

What is Personal Wealth Management? Types and Purpose

From a financial advisor’s perspective, personal wealth management is the practice of adding a variety of financial products and services to clients, in order for those clients to achieve exclusive financial goals.

  • Personal wealth management is especially beneficial for high-income individuals.
  • Several types of forums, from large banks to small family offices, provide personal wealth management.
  • Personal wealth managers generally charge a small fee based on the assets under management.

Knowing Personal Wealth Management

Some private people may lack the time, energy, or knowledge to manage their own finances. So they seek advice from wealth managers who specialize in managing personal finances, often high net-worth- individuals (Hnwi). HNWI has a unique financial atmosphere that requires higher perseverance and a higher level of active management.

The HNWI requires a more holistic approach to investment management than many financial advisors can provide. HNWI can have issues with income tax, estate planning, investment management, and other legal issues that require more special attention and expertise than traditional investment advisors can provide.

Types of Personal Wealth Managers

Personal wealth management services can be provided by banks and large realtor homes, independent financial advisors, or multi-licensed portfolio managers focused on high-income individuals, and family offices.

Many wealth management firms are smaller groups within larger financial forums that focus on providing personalized services to their clients. Their main goal is to manage and grow their clients’ assets to make available to future generations.

The group often has a wide array of advisors and expertise who add guidelines across a wide spectrum of investments including cash, fixed income, equities, and alternative investments. They can create a portfolio of assets that are sufficiently tolerant of investors’ risk while offering opportunities for growth.

Some HNWIs may want to consider connecting a family office. The family office provides more appropriate services to meet Hnwi’s needs. From investment management to charitable advice assistance, the family office offers overall financial solutions for high net worth individuals.

There are two types of family offices: One-family offices help one individual or wealthy family, while more common multifamily offices support multiple families and individuals. Multifamily offices are more prevalent due to economies of scale that are too likely cost-sharing among customers.

How Does Private Wealth Management Work?

Most wealth management companies are cost-based. They charge their clients a fraction of the assets under management. HNWI could have been convinced that fee-based financial advisors have fewer conflicts of interest than traditional commission-based advisors.

Assigned advisors can push investors to front-end and back-end expense mutual funds that charge important commissions, in many issues without offering better performance than no-load funds.

Advances in technology are already too likely for many larger financial advisory firms to provide online services at a lower cost. Although many investors are interested in this type of service, many HNWIs still crave a more personalized approach to their finances, especially with the additional costs that are about.

Goals of financial management

After it is clear the importance of financial management of a company, finally you need to know the purpose of financial management in the company. That way, you can better know their duties in a company.  All matters the purpose of financial management relates to financial control, procurement, and allocation. What are they? Here are the details:

Maximizing profits

Reducing costs is one of the tasks of financial management. If this is successful and revenue can be maximized, effectiveness and efficiency will be achieved. This is where financial management plays an important role in planning cash flow and also company profits.

All terms of profit sharing are also regulated by financial management. Profit sharing to shareholders, incentive assistance to employees, retained profits, utilization of expansion or discovery, and many others are also regulated by financial management.

Availability of funds

The financial management division usually makes an estimate of the company’s capital requirements. The result of such estimates is a number of costs and profits that occur within a single period or short-term or long-term program.  The forecast is useful for predicting the company’s revenue that will be received in the future. This includes short-term and long-term debt equity estimates.


Financial management not only carries out planning, procurement, and utilization of funds, but also controls them. Therefore, the task of financial management is also closely related to ratio analysis, financial forecasting, cost control, and profit.

Benefits of Financial Management, Definition, and Purpose

The result of supervision is an assessment that becomes the material for planning in the future. This supervision is also carried out to ensure that the implementation of the company occurs in accordance with the applicable platform within the company.

Returns to shareholders

Every company that operates must always have financiers or shareholders who fund its activities or operations. After obtaining the funds, surely the company is obliged to return them.

The source of funds received by the company can be direct capital in cash, loans from banks or financial forums, issuance of shares, debt securities, and much more. How much funds are returned depends on the profits and losses that the company suffered in the exclusive period.

Investment Security

To manage the company’s assets and investments, financial management must ensure whether the allocation of funds into the business is fairly profitable. This is also done to ensure the safety of investing and regular returns.

For security requirements in investing companies, financial management should check the data at all times. This is to anticipate if there is misappropriation or loss experienced when the investment process is carried out.

Uses of Financial Management

Come to us on the benefits of financial management. Definitely from the previous description, we can already get an image of the benefits of financial management. Because the task of financial management already explains its functions as well.

Even so, there is a disparity between the purpose and usefulness of financial management. To find out in more detail, let’s look at the benefits of financial management in a company or organization.


A company will be built by a number of plans initiated and carried out by its leaders. Well, in making the planning there is a role of financial management in it.

The benefit of financial management is to make estimates that are related to the company’s capital needs. Finally, the costs and profits that have been determined and worked on by each division will be monitored by financial management. Therefore, from the beginning, the role and usefulness of financial management is very necessary.


Everything that deals with finances is definitely the responsibility of financial management. Therefore, the benefits of financial management in budget matters are very important. Revenue planning and also budget allocation must also be ensured efficiently. That way, the funds owned by the company can be maximized properly.


Financial control becomes the responsibility of financial management when various activities in financial management begin to take place. This control is part of the usefulness of financial management, so that everything can take place according to planning.

Even if there is a disparity or change in the journey, the whole can still be controlled properly. So that in the future era there will be no cases that can be fatal to the company.

Read more Financial Lawyer:


Another use of financial management is to carry out internal audits. With the implementation of the audit, financial management has carried out its function as the organizer of the company. Auditing is also carried out to ensure that the operations or implementation carried out do not occur deflection.

The audit that is carried out must also use established accounting standards. The auditing stages carried out include analyzing, assessing, reviewing, and weighing the work of each division regarding and the company. Then, financial management will compare it with various standards that have been determined by the company.

Those are some discussions that discuss personal wealth management, hopefully this article can be used as a reference and thank you.

2 thoughts on “What is Personal Wealth Management? Types and Purpose”

Leave a Comment