In the first chapter, we discussed what wealth management is and the roles wealth managers play in your financial life. How do you find the right one? We answered that question in the second part, but there’s more to learn. In the third and final chapter are some questions you should ask your wealth manager.
Who is your ideal client? How many new clients do you take on each year?
Know their client specialization. You can use their ideal client profile to see if it’s a mutual fit before you start working together. Plus, by limiting the number of new clients accepted each year, this gives your wealth manager the ability to provide personalized service for each of his clients.
What is your investment approach?
What is the wealth manager’s strategy? How would he or she handle a financial crisis? If you have a strong preference for a particular philosophy, ask your wealth manager what theirs is. Disciplined investment strategies are the foundation of a solid management process. The actions taken should be consistent with your risk tolerance and goals but should suit how you want your money to grow as well. For instance, if you prefer to use low-cost funds, you can ask whether they plan to use actively managed funds or passive investments.
Will I be working only with you or with a team?
This question will also help you see how often you’ll be in touch with your advisor. A wealth manager that is part of a team could meet with you only once a year but still have a colleague or their right-hand person reach out to you and keep you up-to-date. It’s particularly helpful to know who you can contact even if your wealth manager is away or on vacation. Some companies have a team approach rather than an individual approach.
In case of an emergency, how fast can I get access to my money?
Does your financial plan permit immediate withdrawals? Can you get it in time to pay, say, your child’s college tuition, in six months? Many advisers keep money in mutual funds, which allow for immediate withdrawals. But some clients hold hedge funds or other investments, which means you can only get periodic withdrawals. You should be properly informed to avoid having to wait for your funds when you’re cash-strapped and need immediate funds.
A wealth manager can be a great resource for you, your family and your business as you try and navigate the numerous financial decisions we all face every day. Start the process by talking to a wealth manager to learn more and how you can benefit from the advice and guidance of an experienced financial advisor.