Don’t get spooked by the term “wealth management.” While numerous companies are apt to offer you definitions that apply to them and their own particular range of services, the truth is that the terms "wealth management" and the more plebian-sounding “financial planning” are interchangeable.
“The average consumer would say wealth management is for the rich people,” said certified financial planner Edward W. Gjertsen II, vice president of Mack Investment Securities in Northfield, Ill.
In many cases, “firms that use ‘wealth management’ in their titles tend to focus their practice on high-net worth households,” he said, but frequently that is where the distinction ends.
But financial advisors serve a larger purpose as well. For example, your legacy or estate plan — just a fancy name for the program that provides for individuals at all financial levels to leave money to their spouses, children or grandchildren — optimally serves as the foundation of any wealth-building or planning program, said Gjersten.
Certified financial planner Todd Rustman, founder of Clarity Capital Partners in Newport Beach, Calif., points out that professionals like himself are particularly instrumental as “reverse engineers” who help you figure out how to to make your financial dreams come true.
In other words, working backward from your retirement goals 25 or 30 years hence, they are able to extrapolate what you would need to do now or in the future.
Read: How to Find a Wealth Manager
Best Wealth Management Resources
You needn’t be a millionaire or billionaire to gain access to wealth management advice, though it’s true that some wealth management firms might impose minimums investment thresholds of $1 million or more.
Apps, online tools and face-to-face advice all can help. Here’s a summary.
1. Wealth Management Apps
A favorite for both Gjersten and Rustman is Mint.com’s iPhone app. A Huffington Post article says the site already counts more than 10 million users.
Mint’s app is a simple way of tracking all of your credit card, bank account and investment information in a single place.
It's a natural for folks just beginning to think about their finances — it’s designed to demonstrate where you are spending your money every day — and many planning professionals use it themselves.
“I use Mint to let me see all my transactions that go on in my household in real time, and that helps," said Gjertsen. “We swipe plastic, and we oftentimes don’t review our e-statement and then we wonder why we are in a hole every month.”
Registration on Mint.com is free. PC Magazine calls the app an editor's choice.
2. Wealth Management Software
Some of the best wealth management software comes wrapped inside your employer’s 401(k) plan — if it offers one.
“Today, most if not all major 401(k) firms like the Fidelities and Vanguards have very robust 401(k) tools to help plan participants learn where the best retirement savings investment vehicle might be given their risk tolerance level, for instance,” said Gjertsen. Risk tolerance refers to your desire for security, from lower-risk bonds to potentially higher-yield, yet more risky stocks.
“You might be desperately searching outside for retirement help, and it might be right in front of you,” he added. Another plus: any fees for such services would be paid by your employer or folded into your 401(k) fees.
The Huffington Post also suggested checking out personal financial planning software from MoneyStream, Buxfer, moneyStrands and Personal Capital.
Personal Capital helps with budgeting and track spending, and it analyzes your 401(k) plan fees, makes recommendation to your portfolio makeup and determines your investment risk tolerance. The service is free, except for its asset management tool, which has a sliding scale fee schedule from 0.89 to 0.49 percent of assets, wrote Jacob and Vanessa, who blog at CashCowCouple.com.
3. Banks
Take care when it comes to looking to a bank for your financial planning needs.
Banks offering you the option to use their financial advisors for your investments are apt to provide free checking or other incentives, possibly contingent on a minimum deposit amount, said an About.com article.
Or the advisor might be paid entirely on commission and might be more likely to suggest products that do not line up directly with your investment goals, the article added.
Rustman concurred, observing that banks also offer a multitude of other products — such as your mortgage, deposits and business line of credit, for instance. “It’s hard to be a master of all things," he said.
“Definitely I have seen larger-size banks have a private client division where their main focus is to provide a multitude of services to make the client more ‘sticky’ so there is a higher cost for them to leave,” he added.
Moreover, bankers will not necessarily be certified financial planners who have a fiduciary responsibility to do what is in the best interest of the client, said Gjertsen, president of the Financial Planning Association, which calls itself the principal professional organization for certified financial planners..
Generally, advisors without that designation only need to be sure the investment is “suitable” to your goals, and that is “not necessarily the best thing for your goals,” he said.
Still, banks may charge a relatively low 1 percent fee for assets under management since they’re getting money from you elsewhere, Rustman said.
4. Credit Unions
Connection Credit Union of Silverdale, Wash., said its biggest ambition was to provide not just checking and savings to members, but also financial advice, the Guardian reported in 2014.
It’s a tall order. Credit unions have found it hard to compete with major financial institutions’ service offerings.
Credit unions are owned by their the depositors and clients, and they tend to offer better loan rates and higher interest rates on deposits (while still minuscule) than banks. Since its CEO didn't want to raise fees on members to pay the salary of an in-house investment advisor, Connection forged an agreement with online investment advisory firm FutureAdvisor.
A study by management consultant firm Kehrer Saltzman & Associates, quoted in the Credit Union Times, found that from 2008 to 2012, the number of credit unions selling investments and insurance declined by 12 percent —a rate that happens to mirror the 12.7 percent decrease in the number of credit unions nationwide.
5. Blogs and Websites
To study up on wealth management on your own, check out blogger Barry Ritholtz at Ritholtz.com/blog, the Financial Time's Alphaville blog at FTAlphaville.ft.com and Tim Maurer's blog at TimMaurer.com. Of interest to women are FinanciallyWiseWomen.com/blog, DailyWorth.com and the Women's Institute for a Secure Retirement, which blogs at WiserWomen.org.
6. Financial Planners
While there are certified financial planners in wealth management firms, many more have practices that accept lower investment thresholds and might be more likely to provide a hourly rate to simply develop a financial plan for you, said Gjertsen.
Rustman, for instance, considers himself both a planner and wealth manager and says such charges can run $150 to $300 per hour. For investment management, financial advisors — however they are named — would most likely charge 1 percent to 2.5 percent of assets invested per year, he said.
7. Wealth Managers
Firms that use “wealth manager” in their title or marketing material might have investment minimums that can be $1 million or higher. Hourly charges and investment fees tend to be lower, when the amount invested is higher.
Gjertsen recommended doing these searches before choosing a financial professional:
CFP certification, disciplinary history and bankruptcy from the Certified Financial Planner Board of Standards.
The Securities and Exchange Commission investment advisor search. “This is for advisors charging fees," he said. "Look up by individual advisor or firm. I suggest doing both."
The BrokerCheck of the Financial Industry Regulatory Authority, which regulates firms that sell stocks, bonds, mutual funds and other securities. This is helpful to assess those charging commissions, who are sometimes criticized for having an incentive to “push product."
Related: How to Choose an Affordable Financial Planner
Why You Should Consider Family Wealth Management
“Part of our financial planning and goal-setting process involves finding out what’s important to clients," Rustman said, "and the family — kids and grandkids — comes in early on.”
He said you want to know what investment bucket put those family goals into and their tax advantages.
For example, many wealth managers are expert at estate planning — minimizing estate taxes and maximizing allotments to family members through trusts and other devices — and tax-deferred 529 college savings plans.
They also know the rules about gifts. For 2015, people can give anyone $14,000 tax-free, according to the IRS.
Read: How to Find a Certified Financial Planner
Do You Need Wealth Management Help?
So, who really needs wealth management? Probably, many more people than you think.
“In my humble opinion, everyone needs a financial planner/wealth manager,” said Gjersten. “Linking good physical health with good financial health, you may not need to visit the ‘financial doctor; every year, but a regular checkup is definitely recommended."
Unfortunately, he said, “those who may need financial planning the most are the individuals with the least amount of savings and income. A bad financial decision for these individuals may have serious repercussions which may take years if not decades to recover from."
“You don’t have to be rich ... though definitely things cost,” said Rustman. "Also you can always tap an hourly financial advisor or software package and apps to get started,” he added. The bottom line is that whatever the financial issue, everyone can probably use a little wealth management help.
This article originally appeared on GOBankingRates.com: 7 Resources for Wealth Management Help