In recent years, it has become increasingly popular for many financial advisors to call themselves “wealth managers” to differentiate themselves, just as a decade or two ago it was popular to use the term “financial advisor” to differentiate from the stockbrokers and insurance agents.
Yet a recent study from IMCA has sought to better define what “wealth management” really means–and their conclusions imply that it is far more than just a fancy label for advice, and instead constitutes unique job tasks and specialized knowledge and skills different from financial planning and designed to serve a unique type of client: those with at least $5 million of net worth.
If it gains momentum, the implications of the IMCA study are significant, as it implies that some advisors are using a label that is not an accurate description of the knowledge they have and services they provide, and that those who really do wish to work in this area may need to get further training and education. While that is arguably a conflicted perspective for IMCA, as their Certified Private Wealth Advisor (CPWA) certification is intended to target this exact space, it nonetheless remains a valid point: if the job tasks, knowledge, and skills of wealth management really are different than financial planning, then people should use labels that describe what they really know, do and deliver to clients, and should be educated accordingly.
The inspiration for today’s blog post is the release of the new white paper “Defining Wealth Management: Serving High-Net-Worth Clients with a Distinct Body of Knowledge” from IMCA, which discusses the results of a Job Analysis Survey conducted by the organization to better understand what “ wealth management” really is in the first place.
The IMCA Study
IMCA’s job analysis survey on wealth management ties to its Certified Private Wealth Advisor (CPWA) certification–in fact, it’s the same process that the CFP Board used to define its job task domains and body of knowledge topic areas, and is standard for certifications seeking accreditation.
To complete the process, IMCA started by having a volunteer committee establish a tentative set of job tasks, knowledge, and skills, then sent out a survey to financial professionals to determine how relevant and accurate those were. The results were reviewed to determine which were most relevant and appropriate.