How to Choose a Wealth Manager
The search for a wealth manager can be long, but it’s something you shouldn’t rush. We believe a wealth management firm is crucial in protecting and building your wealth, so it’s important you take the time to identify one you’re confident in.
A wealth management firm typically offers a vast array of services including investment management, financial planning, tax planning, retirement planning, estate planning and insurance planning.
Wealth managers specialize in comprehensive financial planning and investment management for high-net-worth clients.
Learn strategies how to choose a wealth manager who is right for your needs and portfolio in this guide.
Why Is It Important to Choose the Right Wealth Manager?
A wealth manager will be one of the responsible parties for protecting and growing your wealth, so it’s essential that you trust their ability and their character. A knowledgeable wealth manager can help you:
- Set clear financial goals.
- Find suitable investments.
- Plan for your retirement.
- Manage your estate.
- Maximize the long-term tax efficiency of your portfolio.
With so much responsibility in their hands, your wealth manager needs to be someone you trust for advice on growing, using, and protecting your wealth.
The Signs of a Reputable Wealth Manager
Your wealth manager should be both competent and reliable, but how can you determine this before you work with them? Here are several signs that a wealth manager may be a good choice for you.
1. Qualifications
A wealth manager often goes by many names and might not have the specific title as Wealth Manager. Some reputable qualifications to look for in a wealth manager include:
- Chartered Wealth Manager (CWM): A CWM specializes in giving financial advice to affluent families and individuals.
- Certified Private Wealth Advisor (CPWA): A CPWA is a designation specific to advising individuals with a net worth over $5 million.
- Certified Financial Planner (CFP): A CFP is an experienced financial professional with well-rounded knowledge of financial planning.
- Chartered Financial Analyst (CFA): A CFA can advise on the more complex investments and portfolios.
- Personal Financial Specialist (PFS): A PFS is a designation qualified by the American Institute of Certified Public Accountants.
- Investment Advisor Representative (IAR): An IAR or investment advisor refers to an individual that is registered with either the SEC or state securities regulator usually through an RIA (Registered Investment Advisor) firm. This is one the more common designations for a wealth manager.
These qualifications require varying levels of experience and demonstrate different competencies and are shown for informational purposes only. While it’s unlikely your wealth manager will have all of these qualifications, holding even one of them shows that they’re well-qualified in their area.
Credentials and qualifications do not guarantee any specific level of skill, service quality, or investment performance. Learn more about the various types of financial advisors here.
2. Experience
Wealth managers will have a certain level of experience by default, although some will naturally have more experience than others.
But it’s not just how many years they’ve been on the job that matters. Ideally, your wealth manager will have served clients with similar financial situations to yours. No two people will have identical portfolios and goals, but if your wealth manager has a history of success working with a similar client, it’s more likely they can effectively support you, too.
3. Review Your Advisor’s Records
All wealth advisors, such as IARs (Investment Advisor Representatives) and SEC registered advisers are legally required to act as a fiduciary. A fiduciary is required to act in the best interest of their clients.
You can search all registered IARs on Broker Check to see details on their registration and if they have any disqualifying acts or complaints reportable to FINRA.
4. Transparency
As a fiduciary, your wealth manager has a legal obligation to be transparent about compensation in regulatory documents. The SEC requires every client receives a form CRS each time they sign an investment account. Form CRS outlines compensation arrangements transparently.
Most private wealth management companies will take their fees as a percentage of assets under management (AUM). For example, if a wealth manager took a 0.5% fee and they managed a portfolio of $20 million, their fee would be $100,000. This fee can be taken monthly or annually, and is based on how many days within that period they managed that portfolio.
Learn more about how much financial advisors cost here.
5. Resources and Infrastructure
To protect and benefit your portfolio, asset allocation is a critical component.
When choosing a wealth manager, make sure you fully understand the suite of services the wealth management firm offers.
Red Flags in a Wealth Manager
Some signs to steer clear of a particular wealth manager include:
- Pressure to make decisions quickly: A good wealth manager will understand the need to consider your decisions and allow you the time you need.
- Unrealistic promises: A wealth manager should know that there are no certainties when investing, and should always communicate this and explain potential risks.
- No clear plan: A wealth manager should draw a clear roadmap for how you can meet your financial goals.
- Poor history: A wealth manager with a questionable performance record, consistently negative reviews, or instances of regulatory issues should be avoided.
- Limited availability: You can’t expect a wealth manager to be available 24/7, but they should respond promptly.
Questions to Ask a Wealth Manager
It’s not always obvious from a first meeting whether a wealth manager is right for you. To assess a wealth manager, we suggest asking them these questions:
- What experience do you have with clients similar to me?
- What qualifications do you hold?
- What services do you offer?
- What is your fee structure?
- What sets you apart from your competitors?
- What is your succession plan?
- Who will handle my account?
- What is your investment and asset protection philosophy?
The answers to these questions will help clarify if a wealth manager’s services, experience, and philosophy are aligned to your needs. Find more questions to ask Financial Advisors here.
Why Trust Our Firm for Wealth Management Services?
If you want to take steps to secure your wealth for the future, it’s important you choose a wealth manager who’s experienced and reliable. Our advisors have worked with many high-net-worth clients, helping each one meet their unique financial goals. We pride ourselves on our clear communication skills and transparency in our fee structure and in everything else we do.
We also know how important it is that your advisor is someone you feel aligned with. We take the time to understand your needs and your philosophy so we can match you with an advisor who we believe is well-suited to you. Begin your journey by using our matching tool to find a wealth manager at our firm who we believe has the experience to help your unique situation.
Find a Wealth Manager Near You
If you’re ready to connect with a knowledgeable wealth manager who understands financial needs and goals, our firm is ready to assist you. To find out more about how our wealth management services can support you, contact our team today to schedule an initial consultation.
Kovitz Investment Group Partners, LLC D/B/A Fort Pitt Capital Group is an investment adviser registered with the Securities Exchange Commission under the Investment Advisers Act of 1940 that provides investment management services to individual and institutional clients. SEC registration does not constitute an endorsement of the firm by the Commission nor does it indicate that the adviser has attained a particular level of skill or ability.
The information included herein may contain statements related to future events or developments that may constitute forward-looking statements. These statements may be in the form of financial projections and may be identified by words such as “expectation”. “anticipate”, “could”, “estimate”, “will”, “should” or similar terms. Such statements are based on the current expectations and certain assumptions of the author and are, therefore, subject to certain risks and uncertainties.
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