Even the most cursory glance at financial media will have told you that there are a whole range of descriptors in terms of the way anyone offering financial advice describe themselves.
You may have been confused by this and wondered what the difference is between a financial adviser and financial planner. Likewise, what does an asset manager do that a wealth manager doesn’t.
And what exactly is a “family office”?
To help you, read my summary of what services you can expect each to provide.
A financial adviser will tend to offer transactional advice
Someone who describes themselves as a financial adviser will primarily focus on transactional or product-led advice rather than a more holistic analysis of your wider needs and aspirations.
The advice you get will focus solely on the specific need they are fulfilling – such as setting up a pension or arranging life insurance.
As a result, you may only deal with them on a short-term basis. Once your immediate requirement has been met, any future relationship is likely to be very light touch.
Financial planners provide a more holistic approach
The work financial planners do, and the advice they give, is driven by your financial goals and will focus on desired outcomes rather than specific products.
A financial planner will carry out a thorough review of your financial circumstances and what your aspirations are. They will then look to implement a long-term financial plan to fulfil those aspirations.
Financial planner is the description that best aligns to the work we do at Charlton House.
We adopt a holistic approach, focusing on your goals and formulating plans as necessary. Both goals and plans will be reviewed regularly and adjusted as your circumstances change.
We always look to establish a long-term relationship with you. We’ll review your strategic plan at least once a year and use cashflow forecasting to help project forward and see what changes, if any, are required to keep your financial plan on track.
As a result of this depth of planning and analysis, our process will also involve other members of your family.
Asset managers will focus on your investment portfolio
In very simple terms, asset management is the practice of managing your investment portfolio with a view to increasing its value over an extended period.
Although sometimes they will work independently, most asset managers will work for an investment company, fund house, or a discretionary fund manager.
They will be solely involved with your investment portfolio, rather than providing any analysis of your wider financial position.
A wealth manager will be driven by returns rather than bespoke outcomes
The role of a wealth manager is very similar to that of an asset manager. Much of the advice you will be offered by a wealth manager will involve your investment portfolio.
Again, they’re unlikely to take a holistic view of your assets or focus on your future financial goals. Their objective will be to grow your overall wealth rather than analysing how to achieve a specific outcome.
It’s important for us to offer you an important explanation here.
As you may have noticed, we describe ourselves as a “wealth management company”. The reason for this is that, because we’re registered in Hong Kong, we can manage your investment portfolio on a discretionary basis. So, “wealth management” is the best description for this function.
Clearly, we’re not a wealth manager in the sense that you’ve read here, as we offer all the services outlined in the section about financial planners.
A family office is dedicated to the financial affairs of a single family
As the name suggests, a family office is typically set up by a very affluent family to manage their overall wealth and financial arrangements.
Family offices provide a broad spectrum of private wealth management services to one or a small number of ultra high net worth families.
Within the umbrella of the single company, they will often employ several different professionals to effectively manage the advice and wealth management process.
These are likely to include:
- Investment professionals
- A bespoke accountancy service
- One or more legal advisers.
If the assets of the family are spread across different jurisdictions, the specialists they employ are likely to be registered in those countries.
The family might structure an investment fund for managing all their liquid assets. After a time they might open up that investment fund to other money from wealthy families and become a “multi-family office”.
Besides financial services, family offices can provide various types of planning, including the structuring of charitable giving, and comprehensive estate planning.
They will also look to educate future generations of the family in the handling and management of their wealth and business interests.
The need for a family office can be determined by the extent of a family’s wealth and the complexity of its arrangements due to that wealth.
I’m seeing an increased number of financial companies describing themselves as family offices these days. In reality they are just advice companies, usually run by wealth managers, and are not family offices in the true sense of the term.
Get in touch
If you’d like to know more about the financial planning services we offer, please get in touch.
You can contact us by email or, if you prefer to speak to us, you can reach us in the UK on +44 (0) 208 0044900 or in Hong Kong on +852 39039004.