From Young Guns To Seasoned Professionals: Wealth Management Demystified

“Money makes the world go round”—the true essence of this proverb is experienced when you swipe that card of yours to buy an expensive article of clothing or jewellery.

One click, and it is all yours!

No matter if you’re a Gen Z, a millennial, or a been-there-done-that professional of late 40s or early 50s, it’s almost a surreal feeling to have ‘salary credited’ message pop up on your phone, and you know for a fact that you can indulge in impulse buying at least for the next few days, unless you are weighed down by loans.

But should you be so cavalier about your spending habits? Maybe you’re ahead of the curve and have mastered the 50-30-20 rule, so you may think you have a good handle on your finances. However, if you have a considerable income at your disposal, it’s no longer only money but wealth that requires an all-hands-on-deck approach in managing it.

Quite naturally, there is no cookie-cutter solution to investment and wealth management, as strategies vary depending on age and priorities of individuals. So, let’s try to understand what managing wealth entails for Gen Z, millennials, and those in their roaring 40s!

What Is Wealth Management?

Contrary to popular belief, wealth management is more than just financial planning but a gamut of asset management operations, ranging from investment management and tax planning to estate planning and risk mitigation. Navigating these complex fields requires specialised expertise, which is where wealth managers play a crucial role—they draw up plans according to the specific long-term goals of clients.

Smart Wealth Management for Gen Z

When it comes to managing wealth for the Gen Z crowd, the keyword is ‘compounding’. Zoomers have a proclivity to enter the world of financial planning young, which precipitates a compounding effect on their investments and savings over the years, giving them a head start on other demographics.

According to a?Livemint report, “55% of Gen Z invest in cryptocurrencies, 41% in stocks, and 25% in NFTs.” Furthermore, Zoomers also demonstrate an entrepreneurial spirit, which exhibits a certain degree of risk-taking ability. In order to fully capitalise on the early start on investments and extract the maximum profit out of new-age financial instruments like cryptocurrencies and NFTs without taking on unnecessary risks, Gen Z needs smart wealth managers who will help them navigate this tricky minefield.

Wealth Management for Millennial Moneymakers

Kicking things up a notch in the age spectrum, millennials’ attitude towards finance and investment is quite different from Gen Z by dint of differences in priorities. As per an?AngelOne blog post, “Millennials focus on financial security, long-term investments, and traditional goals like homeownership.” It also implies that millennials are typically more risk-averse and need to avoid falling in the trap of investing in short-term, high-risk financial products. This is where wealth managers can step in and guide millennial investors through complex tax planning, estate planning, and other monetary decisions that will help them secure their future goals.

Portfolio Management for People in Late 40s

Coming to the seen-it-all mature 40 and early 50-year-olds, investment and wealth management look drastically different. One of the key factors that needs to be kept in mind while managing portfolios of people in this age bracket is their reduced appetite for risk-taking. Those who are almost at the door of their big 5-0, tend to have more responsibilities, such as planning children’s education, ageing parents’ healthcare costs, and retirement planning, which do not leave much room for experimenting with riskier investment options that can create more debts or increase liability. Which is why helping them invest their money judiciously in areas that guarantee a low-risk return, such as debt or hybrid mutual fund schemes or NPS, are some of the safer options that can be explored by portfolio managers.

Importance of Wealth Management

If you have a significant corpus lying in your bank account or you’re in the process of building one, the easiest thing to do is to squander it through impulse buying and imprudent investment strategies. Carefully managing a large sum of money by syphoning them into different financial products is a job for the expert wealth managers, as they understand the lay of the land better than anyone.

Recognising that fact, Ziki is also coming up with life stage services, such as investment planning and portfolio management advice that will help you plan your future financial goals.

Let us know in the comments if you need any advice on planning your finances!