History of Private Wealth Management

History of Private Wealth Management

You’ve probably heard of a private wealth managers, their job and duty to their client. If you haven’t,  here is the explanation of who they are; they are people who take care of the finances of high-net-worth people. Yes, rich people. They plan their investments and advise on saving their money. They also take care of planing the finances when an individual dies.

So you may wonder, where did this term come from, and how? Well, it all started as early as 1933. At that time, private wealth management revolved around ‘private clients’, of course individuals who were wealthier than the rest of the people. Even then, with the prosperity of industry, large money came rolling down and someone who was associated with banks were needed to take care and save earnings for their clients. Division of firms such as Goldman Sachs or Morgan Stanely have used private managers as well.

Who and what are those two groups? Well, Goldman Sachs is a multinational investment banking and Morgan Stanely is a multinational financial servise. Both American great companies who distiguished those divisions’ services from the mass-market offerings. They hit large success and they spread throughout the financial-services industry. In every business, there are so called family offices. No, this does not mean litteral family that is in the office or people who are family in business. This term refers to business investments for a single family.

They manage taxes, trust, legal matters and investments. You can say they were and still are very important for everyone who wishes to have their owned things in control. So as was once family office served just one family, over the time they opened their doors to other families and the Multi-family office was officialy made. This all later contributed to forming Private Wealth Management business and Wealth Management business. If you look at these two terms, their purpose is for the same things but one is for the wealthier individuals. The other is for the people who have money just not in large quantities.


Fifty more or less years later, in the late 1980’s private banks and other firms began to offer various seminars for people to show them expertise and capabilities of the sponsoring firm. At that time, many people realized how important it was to be educated about the things they own and how important it was to actually have someone who can better take care of that and to jump in to help. People started trusting the banks more. This all culminated in evolving the private manager business even more, which is a good thing for people who at that time were doing this very job. The independent wealth managers have also evolved from this, leading to furhter embetterment of this management business.

When the late 2000’s Great Recession happened, it caused investers to have many concerns over their portfolios. The general economic decline can happen in any time and still happens to revolve around the world. Wealth managers because of this reason have been advised that clients do have a greater need to understand and access with advisers about their situation.