How To Select A Wealth Manager – Put Your Financial Future In The Right Hands

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
satisfied clients.

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.

Finding a Good Financial Planner

It can be difficult to find and then build a relationship with a financial planner you trust and who is also looking out for your best interests. It can be a bit like finding love at one of those over-28-nightclub-attached-to-a-shopping-centre situations – nothing is as it seems.

The Australian Securities and Investments Commission (ASIC) warns that in many cases financial advisers act merely as salesman for the products their employee is flogging. This is because eighty per cent of the financial services industry is owned and controlled by the financial institutions that produce the product.

Most financial planners get paid a commission from the product they sell you. This makes the way they are paid one of the biggest problems in finding a financial planner. Some products pay higher commissions, and surprise, surprise, you’ll find that many financial planners structure their advice based on the amount of commission they’ll earn, rather than what’s best for you.

Typically, commissions are made up of the following components:
* What’s known as an entry fee which is up to 4 per cent of your investment
* A ‘trailing’ commission of about 0.6 per cent a year of the value of your portfolio
* Plus ‘soft’ commissions (which they are required to disclose) to pay for trips to conferences and holidays.

When choosing a financial planner, it’s important to know exactly what you’re after – the same as in any relationship. Don’t allow yourself to be intimidated.

The 4 step guide to finding a good financial planner:

1. Talk it over

Interview them. Ask them why they are the best person to manage your money. Ask them about their experience in the industry and their qualifications as an adviser. It’s the first step to avoid being ripped off.

2. Find out if they are registered

Jump on the net and make sure the financial planner you’re considering is at They have to be registered and, by law, advisers must provide you with a copy of their financial services guide. This details how they are paid, what investment products they offer, if they are associated with a financial institution and how the planning firm handles complaints.

3. Check for any affiliations with financiers

If they are affiliated with a financial institution, ask how this affects their investment decisions. If someone is offering to provide you with a ‘free financial plan’ remember there’s no free lunch. You want to know exactly how the adviser will get paid.

4. What’s your gut feeling?

Trust your gut. If you’re unsure, walk away.

Follow these steps, ask the right questions and you and your financial planner will be in for a long and happy relationship.