Chapter 8: Structured Wealth Management Process

Managing wealth is a difficult task since assets traded on financial markets never offer bargains; only trade-offs. To find the best solution, one has to combine the trade-offs that the market offers with the preference of the investor, given the constaints of his personal financial situation. Study of behavioural finance is worthwhile in this respect as it makes one aware of the typical mistakes in investing. This chapter provides insights in to how to structure the advisory process in order to avoid most of the behavioural traps. Moreover, this chapter shows how to address the needs of clients with several investment goals, which differ from the target of maximizing final wealth.

The chapter is structured as follows.

8.1. The benefits of a structured wealth management process
8.2. Problems implementing a structured wealth management process
8.3. Impact of the new process on conflicts of interests
8.4. Learning by ''cycling'' through the process
8.5. Case study: Credit Suisse
8.6. Mental accounting in the wealth management process