Special Report
5 Tips to Choose the Best Wealth Management Firm for You
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Wealth management firms are businesses that work with clients, large and small, to manage their wealth. Since financial goals vary by individual, these firms offer a variety of specialties and services.
24/7 Wall St. created a list of five tips for choosing a wealth management firm, based on the report 5 Tips for Choosing a Wealth Management Firm, produced by financial technology company SmartAsset.
Picking a wealth manager is a personal process since each individual’s financial goals are unique. Wealth managers work with their clients to identify financial objectives and to map out a strategy to achieve them over time. Advisors can help you determine your net worth, create an estate plan, plan your retirement income, all while also managing risks. They can also help with education funds planning, trust and insurance planning, and tax planning. (Here’s what it costs to retire comfortably in every state.)
Here are five suggested guidelines for those seeking a wealth management firm.
1. Find a financial advisor
Many wealth management businesses focus on investors with sizable assets. Others work with clients who have between $50,000 and $500,000 in assets. It’s best to do due diligence when seeking a financial advisor and ask about the kinds of clients they serve and their areas of expertise.
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2. Compare each firm’s services
In the search for a financial advisor, weigh what kinds of products and services various firms are pitching. Some may offer investing advice as well as assisting in taxes and estate planning. Others may offer expertise in certain kinds of investments or strategies such as in real estate investments and picking stocks. Also, take into consideration the firm’s investment strategy and whether it is in line with your goals.
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3. Review each firm’s fee and commission schedule
Wealth managers earn money by charging commissions on the products they sell or by charging fees on certain services. For most people, a fee-only advisor may be the best choice. It’s best to consider the value of the service you are paying for, especially if you are spending a large percentage of your earnings on fees to manage your portfolio.
4. Ask about each firm’s client-advisor availability
Once you have retained a financial advisor, ask about their availability. It’s likely you won’t need to speak with them on a daily basis, but you should ask about the best time to contact them and how often you should meet.
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5. Review each firm’s SEC records and brochure
As you consider retaining a wealth management firm, look into their history. Look them over as if you were interviewing a potential hire for your company. See if the firm has received any recognition or awards. Peruse the reviews they’ve received from the Better Business Bureau or another consumer source. Also ask whether they are a Certified Financial Planner. You can verify whether an advisor is a CFP by checking with the Securities and Exchange Commission or via Finra’s BrokerCheck.
It might take time, but this is your money and you’re entrusting it to them. It will be time well spent.
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