As Woody Allen once said, “Money is better than poverty, if only for
financial reasons.” Most of us want to make the most of the money we’ve
earned and saved. Regardless of your financial situation–independently
wealthy, saving for education or retirement, or simply trying to reach your
financial goals–you want to maximize what you have. And that’s where a
wealth manager can help.
Keep in mind, though, that this person is more than just a financial
consultant. After all, he’s going to be managing one of the most important
aspects of your life: your money. So if you pick the right one, your wealth
manager has the potential to be a trusted advisor and friend. To ensure you
put your financial future in the right hands, following is a list outlining
the characteristics of the ideal wealth manager.
1. Competent. As in any profession, your advisor should have a
successful record at helping clients reach their goals. A first step, then,
might be to ask friends, family or colleagues for their recommendations. And
in addition to possessing a good reputation, a skilled wealth manager should
hold the proper designations-CIMA(r) (Certified Investment Management
Analyst), CFP(r) (CERTIFIED FINANCIAL PLANNER(tm)), PFS (Personal Financial
Specialist), CPA (Certified Public Accountant) or ChFC (Chartered Financial
Consultant), among others-as well as be able to provide references from
2. Versatile. A comprehensive wealth-management plan should include
more than just planning for your retirement, so you need to be sure your
advisor offers a wide range of services and professional assistance. Choose
a manager who can guide you in areas of estate, business, retirement and tax
planning, in addition to insurance and investment issues. Furthermore, she
should offer a network of CPAs, lawyers and other professionals who
specialize in those disciplines if you need a referral.
3. Cost effective. It’s crucial to understand how your advisor plans to
be compensated for his services. Is payment based on a percentage of the
assets under management, commissions that are tied to each trade or a
combination of the two? If the fees seem excessive or to offset financial
gains, you’ll want to look for another manager.
4. Objective. You want to be assured that your advisor is giving advice
based solely on your goals, not on any kickbacks she may receive from
guiding you toward a particular strategy. Red flags include managers who
provide few or no alternative choice in your financial plan, as well as
professionals who use high-pressure sales tactics.
5. Personable. When initiating a relationship with a financial advisor,
it’s important to feel chemistry with that person. So a good wealth manager
will ask questions about your family and your monetary situation, as well as
lay out clear groundwork to meet your goals. It’s also good for you to ask
the right questions: What is his investment philosophy? How will he help you
reach financial independence? Do his answers mirror your own beliefs?
6. Trustworthy. Above all, you need to be able trust the professional
who manages your financial future. You want a professional who understands
your risk comfort and acts accordingly, who listens to your needs and
answers your questions in a timely and caring manner. If she meets all six
of these requirements, you’re well on your way to a long-lasting, trusted
relationship that results in financial independence.