Home 9 Blog Posts 9 Asset Management 9 Legacy wealth management

Legacy wealth management

January 25, 2021
Legacy wealth management

What is legacy wealth management?

Legacy wealth management is a financial planning and management process that aims to achieve certain financial goals. These goals are individual for every user. Some people want to enjoy financial independence during their retirement, some want to provide financial security for their families, others wish to leave a substantial legacy to their children or ensure funding for their college education.

Whatever your individual goals, you need to have a clear idea of them so that legacy wealth management works for you.

How does it work?

Usually, legacy wealth management is conducted by professional wealth management companies or individuals. After the user has presented the financial goals that he or she wants to achieve, the wealth manager prepares a plan for achieving these goals. The plan includes not only activities but, of course, a timeline.

Wealth management companies naturally have associated costs for conducting their activities. Once the client feels comfortable with the suggested financial plan and the associated cost, the company starts executing the plan – actively managing the assets so that the set goals can be achieved.

Who is it for?

There is a common misunderstanding that wealth management is only for wealthy individuals. It is true that some wealth management companies have a minimum requirement for the value of assets, but these days, these are the exception.
Many wealth management companies work with clients with assets of practically any value.

Of course, from a practical perspective, it doesn’t make sense for the client to engage with a wealth management company for a sum of $100. It makes sense to engage with such a company if the value of the assets which they will manage is at least a few thousand dollars, so that your 5-10% annual return results in a good dollar amount.

Usually, people engage with wealth management companies when their savings in bank accounts can sustain them for at least 6 months, at their current standard of living, without any income. Ideally, this period should be 1 year.

When you have more money than that in your bank account, you are financially secure for a year ahead, even in the case of a crisis. It doesn’t make sense to keep more than that in the bank, as you are practically burning your money – the interest rates on bank deposits are quite often lower than the inflation rate. So, in this case, it makes sense to start investing your excess money in wealth management, which can provide way bigger returns than banks do. Annual returns between 5% and 10% are quite frequent.

Still, keep in mind that wealth management usually involves investment in stocks and funds, which bring market risk. Always keep your safety capital for 6 months to 1 year ahead in cash in your bank account, and keep in mind that wealth management is usually a long-term initiative. Don’t panic if markets drop suddenly; look at it from a long-term perspective.

Is online trading an alternative?

Wealth management is a holistic plan to manage your assets to achieve certain goals, usually conducted by experienced professionals.
It’s a “set and forget” thing. It usually involves a broader set of wealth management activities than just investing in stocks.

So if you want to set financial goals and let professionals work to achieve them – wealth management is your choice. If you are an enthusiast and consider yourself a brilliant investor who can beat the markets – do your own investing.

When do you need it most?

Wealth management is the choice of patient people with long-term vision. People who want to take action now so that they can achieve their financial goals in the future.

Our advice is that it’s never too late to start. Even if you start when you are 50, with 15 years of wealth management, you can accumulate very strong returns. Of course, the earlier you start, the better your results will be.

Different types of legacy wealth management

As we discussed, the alternative to hiring a professional wealth management company is DIY.

Many people are attracted by the ease of use of the rising number of online trading platforms and are tempted to start investing on their own.

This path is absolutely possible, but our advice is to compare your performance for a certain period of time with the performance of a few selected wealth management companies. You’ll be surprised to find that quite a lot of them are managed by professionals with decades of experience who can provide returns on your assets way higher than you can achieve yourself.

However, it might turn out that you are an investment guru who consistently beats the markets. In this case, of course, it makes sense to do it yourself.

Legacy wealth planning

While the actual wealth planning is conducted by the wealth management company after you engage with them, you must do your homework before searching for a company. The first thing that you should clarify are your financial goals.

These might be regular annual returns on your assets, increasing the value of your assets over time, etc. Defining your goals is important so that you know how to filter the wealth management companies on the market – not all of them provide for all types of financial goals.

The next thing is to consider the wealth management company in terms of tax implications. In which jurisdiction (state or country) does the company operate, does it work with clients from other jurisdictions, or with assets in other countries or states, what are the tax implications? These are all questions which you have to consider carefully when approaching a wealth management provider.

The most important thing, of course, is the reputation and historical performance of the wealth management company. This information is usually accessible online, so make sure you choose a provider with a solid reputation and returns.

Benefits and Privacy

The biggest benefit of legacy wealth management is that it doesn’t require any cognitive effort from your side. It’s a type of “set and forget” service. Once you start working with your chosen provider, they take care of the management of your legacy; they have the responsibility of providing good returns on your assets and achieving your financial results.

Wealth managers have very formal and strict privacy policies. They know that they are managing very sensitive information, so they adopt very high standards of privacy and security.

Still, we definitely recommend that you proactively ask about this and get more details from your selected providers. It’s always good to be on the safe side when speaking about your legacy and assets!


Wealth management companies usually have associated fees. While they are different for each company, they most commonly range between 0.5% and 1.5% per year.

You need to deduct this from the annual returns that the wealth management provider will bring you, when you are making your plan.

Also make sure to ask the wealth manager about any other fees or costs. While companies are usually very transparent to customers, as this is a long-term engagement and it is important to earn the loyalty of customers, you might still find companies with hidden fees or costs that will increase the overall cost of the service.

Why does legacy wealth management work?

The primary reason why wealth management works is that it is usually conducted by very experienced professionals. Both the company and the individual manager have years of experience and a historical record of performance.

You can lean on that experience and knowledge, and while nobody can absolutely guarantee you certain returns (go far away if someone promises you this), seeing previous results is a strong testimonial and gives you confidence that the company and your individual manager or wealth management team know what they are doing.

Proactive notification (being aware of the assets)

You might ask yourself, if anything happens to you, who will know that you have assets under active management?

Your concern is absolutely justified. Chances are high that your family is unaware of the very existence of your assets under management by a wealth management company.

To hedge against that risk, we definitely recommend using a digital inheritance service, which ensures that, in the case of an unforeseen event happening to you, your family members will be aware of your assets and will know how to identify and locate them.

Something more: quite often, the digital inheritance asset protection services provide additional services such as legal support and tax advisory services, which further help your family in the process of claiming your assets.

Wealth management is great, but ultimately, you want this wealth to go to your family one day, instead of lying abandoned in the wealth management company.

Digital inheritance asset protection services ensure just that!

Peter Minev
Co-founder of DGLegacy - the digital inheritance service that protects your assets and secures your family, when it matters the most. Author of the book Building TECH: https://topstrengthener.com/about-the-book/