5 Smart Ways to Choose a Great Wealth Management Firm

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Written By Katie Tejada McDaniel

You’ve done a good job on your own with financial planning until now, but your portfolio is getting too large for you to handle on your own.

If you need a little extra assistance taking care of your current assets and finding more investment opportunities for the future, you may want to consider retaining the services of a wealth management firm.

In the past, there weren’t as many wealth management firms that you could approach to discuss your finances. Most of the time, you had to deal with small-time financial planners, investment firms, or massive brokerage firms.

Now, there is a growing industry that services a much larger group of people. While you do have many more options than you did in the past, finding the right firm for your financial situation could be more complicated than you think. 

If you are ready to learn how to choose a great wealth management firm, explore some of the most important tips you should consider here.

Is wealth management different than investment management?

Is wealth management different than investment management?Some people consider both of these things to be the same, but they have very different goals when it comes to your wealth.

Generally, an investment firm can manage your wealth, but they are more focused on performance, returns, and asset allocation. You want a wealth management firm that has a much broader scope. You are looking for long-term wealth preservation instead of short-term returns on investments.

Wealth management is about growing and safeguarding your money for future generations instead of just what you plan to use up for your next vacation or for your retirement

1. Service Variety

A wealth management firm is going to be with you for the long term, so you want to make sure that they have the capacity to manage all your needs now and in the future.

They are essentially going to handle your life savings for decades, so you want to look for a firm that knows how to build strong relationships, approach basic financial advising, develop portfolio diversification, review risk management, and consider controlling costs.

Since wealth management is dictated by a number of different factors affected by market trends, you want to find a firm with a broad array of services that can be effective no matter what the investment landscape looks like.

Look for a firm with traditional investment opportunities that is still flexible and experienced enough to adjust its services and strategies according to market projections and trends.

2. Client satisfaction

Another way to ensure you are choosing the right wealth management firm is to look at whether they are keeping their clients happy. You can explore the reviews of the firm to vet their work, ask questions about the ratio of advisors to clients, and check their retention rate.

Will your advisor have too many clients to handle? Are some clients frequently leaving the firm due to dissatisfaction with their customer service?

If an advisor is too busy with their other clients to properly assess your investments and maintain availability to speak with you about your concerns, the firm may not be for you.

Your wealth manager needs to have the time to get to know you, your family, and your financial goals. They need to understand everything about you to ensure that they know what to do with your wealth.

3. Credentials and reputation

5 Smart Ways to Choose a Great Wealth Management FirmSome people choose a wealth management firm based on the total amount of assets they currently manage. If you look for a wealth management firm based on their assets, you could be mistaking firm wealth for good customer service and intelligent investment strategies.

This isn’t always the case, as a firm could be in charge of billions of dollars without showing a significant amount of returns. You could invest with them, but you won’t be getting your money’s worth after paying any management fees.

Research the various wealth management firms you are considering and check their history and client reviews to learn more about what it is like to work with them.

Look into them online and visit them in person for an opportunity to talk to an advisor who may be the one to manage your account.

Treat this in-person meeting like an interview. Ask your potential advisor a number of questions, including:

  • What is their investment approach?
  • What is their business model?
  • Do they consider themselves an investment firm?
  • What services do they offer?
  • What will the client/advisor relationship look like?

Some firms even allow you to discuss in detail what an advisor would recommend for your current portfolio. Have them look over your numbers and offer their preliminary thoughts to get an idea of whether or not they understand your needs.

You should also ask your potential management firm how they are insured. Some banks are FDIC insured. Are there similar safeguards in place to protect your money at the firms you’re thinking of hiring?

4. Considering Costs

For many, the cost of a wealth management service heavily influences their decision. Even though the price of a firm’s services does matter, don’t let it unduly influence your decision.

Your first concern should be the other factors previously discussed. Only if two or more firms are incredibly similar should you look into their fees for managing your funds.

Once it does come down to price, consider which wealth management firm offers you more value instead of which one is literally cheaper. You want quality services for the money you’re paying and you shouldn’t work with anyone that doesn’t impress you.

How to choose the right wealth management firm

Combine all of these factors into your final decision before making a choice about the right wealth management firm for you. Do they understand your needs? Are there protections in place for your money?

Do they offer a broad range of services that evolve as the market does? Are they working hard to understand your goals? Is there always someone available when you want to discuss changes to your assets?

All of these questions need to be answered before you can make a good choice. Review all your wealth management firm potentials as if they were interview candidates and pick on based on how they will perform for you.

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