Updated: Feb 15
One of the first steps to choosing the right manager for your wealth is knowing what questions to ask. And knowing the right answers to see if they align with your financial goals.
When you have your initial interview, here are the top 6 questions you want to be sure to ask.
1. How long have you worked with high net worth individuals and in what capacities?
When seeking an advisor, you are looking for an individual or firm that has worked with clients similar to your net worth or higher. Based on the answer to this question, you are seeking their level of experience with the needs of this type of clientele. By having this experience prior to you, the firm will be able to anticipate your needs -- from real estate to evaluating insurance policies and taxes to estate planning.
2. What training did you undertake to prepare for this role?
Consider how your adviser stays up to date and whether their answer reflects their commitment to staying current in a dynamic profession and industry. The top designations in wealth management are the Chartered Financial Analyst (CFA) designation or the Certified Financial Planner designation. Ask how your advisor maintains his continuing education requirements.
3. Describe your proposed fee schedule. How does your fee schedule align with achieving my goals?
Many advisors will assess a fee based on the market value of assets they manage on your behalf. Discuss with your advisor how such fee arrangements might affect their advice and what would cause the level of assets under management to decline as well as how growth in assets would affect the marginal cost of their advising services.
4. What is your approach to investment management? Do you prefer a particular investing style? Do you prefer particular investment vehicles?
Your advisor should be able to explain why they choose to execute their investment strategy in the way they do. This explanation should reveal their priorities for diversification, expense control, tax management, and/or liquidity. Consider how your advisor has regarded more recent innovations in the marketplace to assure you they bring fresh perspective with their strategy.
5. How often do you interact with your clients and in what way?
Communication and transparency are essential elements of your relationship with an advisor. Based on the answer the advisor gives you, consider if the level of interaction is appropriate to the complexity of your needs, the stage of your relationship with the advisor, and your own comfort level.
6. In addition to investment management, what other services does your firm offer? Are there services I will one day need? Will this firm work with my other advisors?
As your wealth grows, so will your wealth management needs. Having a firm you trust with services you can grow into as needed will provide you with peace of mind knowing you are in good hands. You may need help with insurance, estate planning, trusts, real estate, and tax planning. Having an advisor that can coordinate with your attorney and accountant will save you time and money.
The answers to these six questions are important to knowing if the advisor is a good fit for you. But what is even more important is if the advisor brings you peace of mind and confidence in their ability to manage your wealth.
If you have more than $2 million saved and need a financial plan to reach your goals, the Peak Wealth Planning team can assist.
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About the Author
Peter Newman is a Chartered Financial Advisor (CFA) and president of Peak Wealth Planning. He works with individuals nationwide that have accumulated wealth through company stock, ESOP shares, real estate, or running a business. Peter applies his unique background to help clients achieve their specific goals and enjoy peace of mind.
Peak Wealth Planning provides concierge services to meet your wealth management needs. Services include: financial planning, investment management, esop diversification, retirement income, insurance, and estate planning advice. Peak Wealth Planning is a fee-based financial advisor based in Champaign, Illinois, and Fraser, Colorado.