If you are new to investing and don’t want to spend months and years learning the correct way to do it or if you’ve been investing for a time and now have a portfolio that is too large for you to handle on your own, wealth management services can be a great option. These professional services work with you to identify your financial objectives and chalk out an investment plan to achieve them.
But with so many such professional firms and individuals now available, how will you pick the best? We’ve created a list of 5 factors that can help.
It is very important for the firm to have the expertise in dealing with complex issues that your situation can present. Avoid firms which claim that they’ve handled hundreds and thousands of clients who were struggling with the same problem as you. The reality is, it is almost impossible for two investors to face identical concerns or situations.
Thus, make sure that you ask the firm to talk about some clients with similar situations like yours and some particular examples of how the firm helped such clients.
Would the service provider be able to offer many different products, services, and effective timely investment ideas? While most of the registered fund management services work on an “open-architecture” manner due to which they are able to find investment opportunities across different providers, some of them are very much limited due to their AUM (Assets Under Management).
Due to this, some of them also have limited access to investment alternatives like private REITs, hedge funds, etc. which are less liquid in nature.
Make sure that the firm you select would be able to offer the management services as long as you need. In simple words, if you are planning to retire in 8 years, it shouldn’t be as such that your advisor is planning to do the same.
Prefer firms that have a solid succession plan to ensure that they’ll be able to offer seamless services as long as you need.
Compensation has a major impact when you are looking for services like wealth management. Make sure that the compensation plan of the firm is well-aligned to the best interest of the clients. Before forming any kind of advisory relationship, it is very important to know how the firm would be compensated.
Ensure that you ask a lot of questions with regards to the compensation structure to avoid any kind of disputes in future.
The firm should also be able to provide references which can confirm their ability to manage portfolio and objectives like yours. You should make sure that the firm has delivered excellent results on a consistent basis with respect to their portfolio and wealth management services.
Also, ensure that the results are consistent for several years and not just a few months or last couple of years.
Most of the wealth management firms and their clients only benefit when they are able to create a long-lasting relationship as most of the investment plans take several years to deliver expected results. Thus, as an investor, it is very important for you to know as much as possible about the firm before getting into any kind of advisory arrangement as this is the only way to ensure long-term success.