Written by: Jason D. Nickerson, CFP®, EA, Executive Vice President

What is CWM?

Well, the first thing to answer is, what does CWM stand for?  Answer; Comprehensive Wealth Management.  We have heard this similar phrase substituting similar words, but does it still mean the same?  That may be the topic for another blog, but for today, I would like to dissect this CWM and define what it really means, at least in my eyes.

Most would think we are going to start with the first word in the phrase, but how much fun is that?

Let’s start with the middle word of Wealth as I think it adds clarity and definition to the entire phrase.

Otherwise, we are “managing comprehensively” or “comprehensive management” and our minds wonder as to what the point of this blog really is and how boring it is about to get.  Wealth in most people’s minds refers to money, and that would probably cover 60-80% of what that word could mean.  But, if that was only what it meant, why wouldn’t we use the word Financial (one of those substitutes I mentioned above)?  To me, Wealth means whatever we find value in or assign value to, and how much we have of it.  I am not a direct descendent (that I know of) of Samuel Johnson Jr, the man credited with writing the first English dictionary in America. So let’s refer to Merriam-Webster for their official take.  Wealth is defined as “abundance of valuable material, possessions or resources.”

Great, I don’t think I was too far off.

Let’s continue with the remaining words in our phrase.

Next, we will take a crack at Management.  I think we can agree that the definition would include words like oversight, decision making, care for, and others.  Merriam-Webster says: “the conducting or supervising of something.”  Okay, not even close this time, but I do believe we have a more “comprehensive” definition now combining my thoughts with theirs.  Oh, and check out the Segway in that last sentence.

Comprehensive, I say all-encompassing.  M-W, what say you?  “Covering completely or broadly,” sounds like we nailed that one.

Now, what if we bring all three words back together to define the whole phrase?  Comprehensive Wealth Management: To conduct or supervise the many possessions or resources that we find valuable in an all-encompassing way.  Ouch, that got ugly, and I am sure that is why I have never been asked to write for any dictionary publisher.  I will work on it, but for now, we have a theme, so what’s the point of all of this?

Listen, as stated earlier, there are many iterations of this phrase out there in the world in which we operate.  To me, they do not mean the same, and to us, this phrase speaks to who we are.  When you substitute the word Financial for the word Wealth, it becomes pretty clear to me what the focus is.  We believe in total Wealth management as we are not just overseeing the dollars in your bank accounts or retirement plans.  It is a lifestyle for which we dream about or become accustomed.  Wealth denotes how we hope to help our children in various phases of their life be it education, embarking on a career, or starting a family.  Wealth refers to peace of mind knowing our aging parents are well taken care of as they move into their “golden years.”  As you can see, Wealth is not just about our account balances; it is about the things we have a high value for and obtaining peace of mind around them.

When we add the other words of Comprehensive and Management, to this phrase and start to create a more eloquent definition and understanding, we find that this is more than the returns in our portfolios and cutting edge tax strategies.  It is about the decision making that goes into creating a path for us that leads to comfort and peace of mind.  It’s about protecting that for which we have worked so hard.  It is about optimizing what we have and what we will build.  It does not mean getting the most, but making the most of what we get and making decisions that are suitable for what we are hoping to achieve.

Some companies will say they offer this approach.  If you come across them, I ask that you dig in and understand what they are offering.  Is the first thing they ask for your account balances or what insurance policies you own?  Or do they ask about you, and what is important and valuable to you?  Do they run all sorts of fancy calculations and hand you a big binder and send you on your way?  Or, do they partner with you to implement the decisions you have made after discussing various options and providing education on the pros and cons.

Do they outsource as much of the work as possible to accountants and other investment companies?  Or, do they have a team that creates a relationship with you and works to understand who you are to provide as much customization as possible.  You see, in that last sentence, we have uncovered yet another form of Wealth, relationships.  When we have good relationships, we have trust and confidence and can confide in them.  We rely on them in good times and bad.

If you have made it this far in the article (thank you), you may wonder if this relationship exists in the financial services world.  Well, would I be writing this article if it didn’t?  I think you understand what I hope you got out of your time reading this without me having to lay it out bluntly.  And no, it was not to improve your vocabulary or give you a trivia question to use on your friends (the part about who wrote the first English dictionary in America).

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