Wealth managers are responsible for guiding their clients towards financial stability and success. One main area that many clients may overlook is mineral management. Mineral management is the process of managing oil and gas mineral rights, which are often overlooked assets in a client’s portfolio. Wealth managers who incorporate mineral management into their practice can provide their clients with a more comprehensive approach to wealth management. In this article, we will explore the reasons why a wealth manager needs to use a technology partner who provides a comprehensive online web-based solution for proactive mineral management.

Mineral management can provide another source of income for clients. The income comes from leasing mineral rights to mining or energy companies or receiving royalty payments from production on those mineral rights. Without the use of technology, it’s almost impossible to deliver accurate revenue reporting of royalty payments and proper oversight of a portfolio of mineral assets. Tracking anomalies such as underperforming or unreported assets or other issues that would negatively impact a client’s revenue are key features of the technology needed to provide management of assets.

Diversification is a fundamental principle of investing, real property assets like minerals provide just that. Traditionally, oil and gas are the typical mineral rights that have been the bulk of a portfolio. However, there are significant investments being made in surface, wind, solar and hydro, each with different income streams and unique data attached. With the use of proactive technology to bring all the portfolio statistics together for a comprehensive review, a wealth manager can help their clients diversify their investment portfolios.

Mineral management can provide clients with significant tax benefits. Mineral rights can be depreciated over time, reducing the taxable income generated by the property. Additionally, royalties received from mineral rights are typically taxed at a lower rate than other forms of income, such as wages or investment income. Wealth managers who incorporate minerals into their practice can help their clients take advantage of these tax benefits and reduce their overall tax liability.

The wealth managers who incorporate mineral management into their practice can help their clients create a plan for passing down their mineral rights to their heirs. This can help ensure that the client’s legacy and wealth continue to grow and provide for future generations. The mineral asset landscape is still based on real property, and that landscape is riddled with inefficiencies. The use of proactive technology to maintain ownership records, identify negative trends, evaluate portfolio value over time and track revenue to manage assets can help protect and preserve multi-generational wealth, is a full-time job.

In conclusion, wealth managers who understand the potential benefits of using a technology partner to proactively provide mineral management to effectively manage their clients’ mineral portfolios can add significant value to their practice and help their clients achieve financial success. Traditional mineral management is just not enough in today’s world. By diversifying their clients’ portfolios, providing another source of income, building long-term value, managing risk, providing tax benefits, and planning for their clients’ legacies, wealth managers can help their clients achieve a more stable financial future.