Arguably, the most notable wealth management institutions are found in Geneva. The phrase â€œdeposited in a Swiss Bank accountâ€ has been effectively branded regardless of the actual institution. In the financial community, those who manage the assets of high net worth individuals (HNIs) operate with different strategies than financial advisors for traditional (average) investors. A wealthy investor often looks for two things when interviewing a prospective manager at a Geneva wealth management bank: track record and credentials.
General Categories of Wealth Managers
The wealthy hire advisors from a range of specialties. They do this in order to manage their retail banking, legal-financial concerns, taxes, estate planning, and long-term investments. Some examples are:
- Chartered Financial Consultants
- Certified Financial Planners
- Chartered Financial Analysts (USA)
- Chartered Strategic Wealth Professionals (Canada)
- Chartered Financial Planners (UK)
- MBAs and other credentialed professional money managers
General Categories of Advisors
It helps by starting with the major categories of financial advisors. They generally fall under the categories of Financial Planner, Wealth Manager, or Broker. In detail, these designations mean:
- Financial planner â€“ financial planners are held to a high fiduciary standard. They generally hold the CFP credential. Often, insurance providers will call themselves financial planners in order to generate business. True financial planners focus on developing a written financial plan that is executed elsewhere. They make their money through an hourly or project-based fee for the financial plan only. This helps keep them as an unbiased source of information.
- Wealth manager â€“ wealth managers are found in trust companies and at the Registered Investment Advisors. They work closely with clients and make portfolio adjustments as the market or client circumstances change. Although wealth managers are not biased towards a particular investment interest, they are not always highly motivated to pay close attention to portfolios, especially those that are smaller.
- Broker â€“ brokers are paid on commission and tend to focus on long term investments. They often favor particular investment types that bias their client offerings.
Understanding the Different Designations
An HNI who is surveying the industry would do well to start with a basic primer of the various types of credentials, which include the following:
- Certified Investment Management Analyst (CIMA) â€“ these professionals work with both institutional and individual clients as investment managers, advisors, and consultants. They must pass a level one qualification exam and a level two certification exam to hold this credential. These tests focus on portfolio performance, risk measurement, and the consulting process itself. They also cover statistical analysis, applied global capital market history and asset valuation. Most CIMA certificants work for large brokerage firms. More than a third serves as independent broker dealers or independent financial advisors.
- Chartered Financial Analyst (CFA) â€“ the CFA institute awards this globally-recognized certification, which comprises portfolio and investment analysis skills. Certificants pass three sequential exams, which cover asset classes, wealth planning, portfolio management, and investment tools.
- Certified Financial Planner (CFP) â€“ this certification is the industry standard for those performing financial planning. They employ holistic techniques to help clients manage retirement, budgeting, and insurance. CFP testing includes qualification for tax planning, general financial planning, and asset protection planning.
- Other certifications, including Certified Private Wealth Advisor (CPWA), Chartered Financial Consultant (ChFC), and Certified Trust and Financial Officer (CTFA).
Understanding and comparing these credentials, in conjunction with examining performance records, puts an investor in the best position to make an informed decision concerning their Geneva wealth management bank.
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