What High Net Worth Investors Need from a Financial Advisor

Joseph W. Chase, CFA® BY: Joseph W. Chase, CFA® 01.22.19

How to Pick a Financial Advisor who is Best Suited at Managing Your Wealth

Selecting a financial advisor can be a difficult and stressful process. How do you know you are choosing the best advisor for you?

You may have needs that should be managed by others, both to free up your time and for the peace of mind that professionals are managing your wealth–and potentially complex planning situations–on your behalf.  

So, what are the factors you should consider when evaluating your advisor to know you are making the right choice for you, your family, and your wealth? Here are several key points to keep in mind.

What You Need: Trust

First and foremost, you have to be able to trust your advisor. You need to know they are working exclusively in your best interests and there are no hidden incentives or conflicts working against you.

How You Get It: Fee-only advisors working in a fiduciary capacity provide you with peace of mind that your interests are aligned with your advisor.

What You Need: High-Touch Service

You should have a direct line to a member of your service team who knows your entire financial situation. Whether you have a question about your portfolio, or would like to discuss your estate planning strategy, the ability to connect with your trusted advisor will allow you to sleep well at night knowing your family’s financial future is being looked after.  

How You Get It: Having a close relationship with your advisor fosters a strong bond of trust that is crucial to a successful long-term advisory relationship. Working with a firm that has a low client-to-employee ratio is one indicator of the level of service you will receive, including quick turnaround times and the ability to see a task through to completion.

What You Need: Efficient Management and Concise Reporting

With your busy schedule, you need an advisor that can operate efficiently, and independent of your day-to-day oversight. This type of relationship allows you to focus on what matters most to you, rather than chasing down tax documents or reading through your estate documents to figure out, for example, who is the trustee of each of your trusts. Working with an experienced advisor will give you more time to spend doing what you love. After all, time is among your most valuable assets.  

How You Get It: Working with a firm that invests in appropriate technology and systems can lead to a more efficient experience for you as the client. Reporting on your financial life must also be done efficiently and clearly. With a complex financial picture, summarizing intricate estate documents, tax considerations, and insurance coverage into succinct and comprehensible reports is a vital component of an advisor’s duty.  

What You Need: Integrated Investment Management & Financial Planning

Portfolio management and financial planning decisions cannot be made in silos. Each investment decision has implications for your tax situation, your estate plan, and your cash flow needs–and vice versa. Your advisor should have an in-depth knowledge of how each of these decisions interacts with other components of your unique financial landscape in order to take all factors into account.

How You Get It: Your advisor should work closely and cooperatively with your other professionals, such as estate attorney, CPA, and insurance agent, to provide a cohesive strategy that fits your goals.

What You Need: Portfolio Strategy and Nontraditional Investments

Once you and your advisor discuss your needs, goals, and constraints, your advisor should thoughtfully construct a portfolio that meets your needs for risk, return, liquidity, and time horizon. Developing your portfolio strategy should be a two-way conversation and your input should be incorporated into the portfolio. Outside of stocks and bonds, alternative asset classes such as hedge funds and private equity can enhance the risk/return profile for your portfolio.  

How You Get It: Working with an advisor who specializes in high net worth clientele can provide you with access to opportunities in alternative asset classes.

What You Need: Family Legacy PlanningYou have accumulated substantial wealth through your hard work. Now that you have your basic needs covered, how do you use your time and your wealth to move higher up in Maslow’s Hierarchy of Needs? What impact do you want to leave on the world? What would you like to leave to your family? What would you like to leave charity?

How You Get It:  These choices are yours to make, and your advisor should help you think through these important decisions to ensure your legacy carries on for decades to come. Through expertise in estate planning, customized investment portfolios, and tax considerations, your advisor should help to turn your goals into an action plan, and then see it through to completion.

Selecting the right advisor for your family is an important decision. As you evaluate prospective firms, think through the items outlined above to determine who will be the right fit for your family for long-term success.

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