6 Questions to Ask a Wealth Manager Before Engaging Their Services

It can be challenging to find a reliable and competent wealth manager. To help you navigate the process, we’ve created this handy question list so you gain the valuable information needed to find the best wealth manager for your situation.

#1: What’s their experience?

What is the experience of key players relative to other companies? Are they from different areas of the investment industry or are they all from different backgrounds? While it is important to have experienced investment professionals managing your portfolio, it is equally important to have diverse groups that have different perspectives on capital management. It might also be a good idea to seek out a certified wealth manager, as they might have better knowledge when it comes to researching and providing solutions.

#2: Do team members invest their own money?

It is important to determine if your advisor has significant personal capital invested alongside their clients’ investments. After all, it stands to reason that advisors will be more diligent and work harder if they have skin in the game, so to speak. Advisors who invest in the same portfolios of their clients have a higher level of accountability. This creates long-term trust in the investment strategy.

#3: What assets do they manage?

Because of the direct correlation between how important your capital is to an investment management firm and the amount of attention your portfolio receives from a client service perspective, it is important to consider how much your capital is worth. A firm with a large number of assets they manage may be more advantageous due to its scale. However, small boutique firms can offer personalized services that best fit their clients’ needs and allow them to be more agile in the market.

#4: How often are strategies changed, and why?

It’s not unusual for an investment management company to transfer assets to another fund. But what’s important is finding out the reasons behind any strategy switch. Firms often close portfolios that are not performing and then open new portfolios that align better with ever-changing market conditions. Ask whether there were performance fees thresholds for funds that were closed. Did those thresholds have an impact on the decision to close the fund? Ask them for detailed explanations.

#5 Have there been any significant firm changes?

Examine any corporate actions that may have affected the organization of the company. Changes in control could indicate a shift in investment strategy or, even more importantly, a change of key management directors at the investment firm. The firm’s strategy can be affected by significant changes in the management team. Clients should check that the people responsible for its past success are still available to help them pursue their investment strategies.

#6 – What is their fee structure?

It’s important to ask the firm about base management fees, performance fees, custodial fees, and other fees associated with wealth management services. These fees may be combined to maximize the investment manager’s net fees. The overall cost of managing investments can be more expensive than one might think. Because it can have a significant impact on portfolio returns, it is important to understand the nature of the revenue stream.

Before you commit your hard-earned money, it is important to research all options and choose the wealth-management firm that works best for your unique needs.

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