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Wealth Management Firm

Wealth management firms are all different. As a result, the process for choosing a wealth manager is a very personal one. Wealth managers work with their clients to identify financial goals and map out a plan for achieving them that’s built around choosing solid investments that’ll grow over time. If you’re ready to build serious wealth, there are a number of guidelines you should follow for choosing a firm.  You can also use SmartAsset’s free financial advisor matching tool to help you find matches in your area.

What Is a Wealth Management Firm?

Wealth management is perhaps the most comprehensive financial service you can take advantage of. That’s because it’s holistic in nature, meaning all of your financial needs, goals and circumstances will be taken into account. This level of personalization is rare, which is why some firms may not even offer full wealth management.

If you subscribe to wealth management services, here are a few offerings you might come across:

  • Net worth determination
  • Estate plan creation
  • Retirement income planning
  • Education fund planning
  • Trust planning
  • Tax management and minimization
  • Investment management
  • Insurance planning
  • Risk management

Of course, to get this type of attention you’ll likely need to pay somewhat pricey fees. However, for many people this is still worth it, as handling all of these needs on your own can be quite difficult.

Tips for Choosing a Wealth Management Firm

If you sign on with a wealth management firm, it will be one of the most important financial decisions you’ll ever make. In turn, it should be treated with a strong attention to detail. After all, you’ll be paying fees to a firm for this level of treatment.

Just like any financial decisions, there are a number of factors to be aware of and important questions to ask. Below are some good guidelines to follow when you’re picking a wealth manager or wealth management firm to invest your money with.

1. Get a Feel for Each Firm’s Ideal Client.

In general, wealth management firms cater to investors who have a sizable asset base, but they don’t all take the same approach. Some wealth managers may prefer to work with clients who have between $50,000 and $500,000 in assets, while others might exclusively target millionaires. Asking a wealth manager about the kinds of clients the company works with can give you a sense of where their expertise lies and whether that coincides with what you’re looking for.

2. Compare What Services Are Available at Each Firm.

Wealth Management Firm

If you’re on the hunt for a wealth manager, you may already have a clear idea of what you need them to help you with. If that’s not the case, it’s important to consider what kinds of products and services different firms offer. Does your wealth manager only offer investing advice or does the firm also assist with things like taxes or estate planning? Some firms may specialize in certain types of investments or strategies. For instance, some firms focus exclusively on real estate investments, while others prefer stock-picking.

It’s also a good idea to pay close attention to the firm’s overall investment strategy to make sure it aligns with your goals. If you’re considering several different firms and they’re all offering the same cookie-cutter portfolio options, that’s a sign that you may need to look elsewhere.

3. Check Out Each Firm’s Fee Schedule.

Wealth managers can help you increase your wealth but they don’t work for free. There are two basic ways that wealth managers get paid: by charging commissions on the products they sell or assigning fees to specific services. If you’re not interested in being bombarded by a sales pitch every time you meet with your wealth manager, a fee-only advisor may be your best bet.

When it comes to cost, the most important thing to consider is the amount of value you’ll get for what you pay. If you’re spending a large percentage of your earnings on fees, it’s a good idea to be sure that your portfolio’s performance is worth the added expense.

4. Ask About Each Firm’s Client-Advisor Availability.

While you probably don’t need to speak to your wealth manager on a daily basis, you might need to be in touch with them regularly. Asking how often they meet with their clients and how they prefer to communicate is important to ensure that you’re both on the same page. If you have concerns about a particular investment or a question about a fee, you don’t want to be left in the dark.

5. Take a Look at Each Firm’s SEC Records.

Wealth Management Firm

Wealth management firms can have millions or even billions of dollars in assets under management, but that alone isn’t an indicator of how well they serve their clients. If you’ve zeroed in on a handful of firms, consider their past history. For instance, has the firm received any special recognition or awards? Can you find positive reviews through the Better Business Bureau or another consumer site?

Digging into a firm’s background may take a little time but it can be worth the time and extra effort if you’re on a mission to build wealth in your 20s and 30s or before you reach retirement age.

Bottom Line

Working with a wealth manager is all about forming a relationship with someone who has a fiduciary duty to you and cares about your money as much as you do. Choosing the wrong person for the job has the potential to be disastrous, not only for you but for the next generation if you’re planning to pass wealth on to your heirs. Using our tips as a framework can make it easier to find a firm that’ll have your best interests in mind.

Tips on Finding a Financial Advisor

  • If you want help managing your financial plan and investments, a financial advisor can help. Finding a qualified financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three financial advisors in your area, and you can interview your advisor matches at no cost to decide which one is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
  • When you meet with a financial advisor, make sure you are asking the right questions. This will enable you to ensure that whichever advisor you choose is fully the right match for you.

Photo credit: ©iStock.com/sturti, ©iStock.com/shapecharge, ©iStock.com/DragonImages

Rebecca Lake Rebecca Lake is a retirement, investing and estate planning expert who has been writing about personal finance for a decade. Her expertise in the finance niche also extends to home buying, credit cards, banking and small business. She's worked directly with several major financial and insurance brands, including Citibank, Discover and AIG and her writing has appeared online at U.S. News and World Report, CreditCards.com and Investopedia. Rebecca is a graduate of the University of South Carolina and she also attended Charleston Southern University as a graduate student. Originally from central Virginia, she now lives on the North Carolina coast along with her two children.
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