According to a report published by Wealth-X, the number of high-net-worth individuals is expected to reach 7.7 million globally by 2023. Many wealthy individuals work with wealth management firms to develop a strategic financial plan and investment portfolio. Deciding to work with a dedicated wealth manager is simple but selecting the right wealth manager can be more complicated. Witht that being said, how do you choose a wealth manager?
What Is A Wealth Manager?
A wealth manager is a type of financial advisor that provides wealth management services exclusively to high-net-worth clients. The U.S. Securities and Exchange Commission (SEC) defines an individual with a high-net-worth as someone with a net worth of $1.5 million or at least $750,000 in assets under management (AUM). Wealth management firms offer a wide range of money management services, such as general financial and investment advice, accounting, estate planning, legal planning, tax services and retirement planning.
Who Needs A Wealth Manager?
Not everyone with a high net worth requires the services of a wealth management firm. These services are best suited for individuals who do not have extensive knowledge of investments or expertise in financial instruments. Also, a wealth manager can be an excellent choice for high-net-worth clients who may not have the time to continually monitor, evaluate and make periodic changes to their finances and investment portfolio. A wealth manager can also introduce clients to new and popular financial products that may help them build their wealth even faster.
How To Choose A Wealth Manager
Wealth encompasses more than just money and resources. It can also have a direct impact on a person’s life, stability and overall happiness. Selecting the right wealth manager can significantly affect a client’s ability to continue building wealth and meeting key goals in a timely manner.
When comparing wealth management firms, here are some actions that every person should take before making a decision:
Assess Their Clients
Determine who is the ideal client for a wealth management firm. Most wealth managers work exclusively with clients with a high net worth. Some wealth management firms welcome clients with $50,000 or more in assets, while others only target millionaires. Clients should ask the firm what types of clients they typically work with to determine if they are a good match. Read reviews and testimonials from past clients to see if they align with the wealth manager’s claims.
Research Their Track Record
Consider a firm’s track record when interviewing different wealth managers. Although a wealth management firm may manage millions or billions of dollars in assets, this alone does not mean that it successfully serves its clients. Perform research and look at the firm’s history and performance over time. Are there positive reviews posted on consumer websites like the Better Business Bureau? Has the firm received any special awards or recognition? A track record of success may indicate that a wealth manager is a good option.
Ask About Their Experience Being A Wealth Manager
One of the most important topics that a client will want to discuss with their wealth manager pertains to experience. Start by asking how long they have been a wealth manager. Answers may vary, but ideally, a wealth manager should have at least ten years of experience. Ask other important questions, such as if the wealth manager is a fiduciary, their philosophy regarding active and passive management and how long their clients stay with them on average.
Find Out Their Pricing And Service Offering
Cost is a major factor for many clients seeking wealth management services. A wealth manager can help clients build their wealth, but they charge a fee and may receive commissions on the products they sell in exchange. Ask about pricing and determine if the services will provide sufficient value or if a large percentage of the earnings will go towards service fees.
Ask Them The Right Questions
How a wealth manager answers important questions can help a client determine if they are making the right decision. Ask the wealth manager how costs are minimized. All commissions, fees and other expenses should be disclosed from the start. Next, ask how often a client’s financial plan is updated. Ideally, financial plans should be reviewed once a quarter. Finally, ensure that the wealth manager is dedicated to customer service. When a client contacts the wealth management firm, they usually want to speak directly with their wealth manager and not a low-level customer service representative.
Work With The Wealth Managers At Campbell Wealth Management
Choosing a wealth manager is not an easy decision but an important one to ensure that a client’s assets are put in trustworthy hands. For nearly two decades, Campbell Wealth Management has been helping clients age 55 and older build a secure financial future. To learn more about how to choose a wealth manager or to consult with an experienced wealth management firm, reach out to the money management professionals at Campbell Wealth Management today.