Wealth management firms offer a variety of services. To have these types of services, you’ll likely pay a fee, but most people find the cost for what you get worth it. Handling it on your own is often too much. Wealth managers will get to know you and your financial goals and help you make decisions that are in your best interests—that is, if you choose the right firm.
If you partner with one, they may help you with:
- Determining net worth
- Creating an estate plan
- Creating a retirement plan
- Planning an education fund
- Trust funds
- Risk management
How to choose the right firm for you
Here are three ways to choose a wealth management firm that’s right for you:
1) Compare Firm to Firm
Not every firm offers the same services in the same way. First, know what you’re looking for in a firm. Then, research the firms available to you. Lastly, make a list of each firm’s services. Are some services nonnegotiable for you? Are others unnecessary? Does one firm specialize in something while a different specializes in another? Which one is more important for you?
Wealth managers form a relationship with their clients, and since the relationship involves your finances, you may need to communicate with them often and for the long-term. Find out if their preferred method of communication matches yours. You want to be the type of client that will mesh well with their firm.
2) Choose the Price
Like wealth management services vary depending on the firm, so does the cost of them. You’re wanting to hire someone to help increase your wealth, not deplete it, so take note of their fees and commission rates. You may want to choose a fee-only advisor, or you may want someone who works doubly hard for an extra incentive.
It comes down to what you get for what you’re paying. If you’re spending a large amount of money on fees, make sure what you’re getting in return is worth the extra expense. Overall, you need to choose the wealth management firm with the best value.
3) Know Their Past
Some firms promise things they haven’t accomplished. One way to be sure a wealth management firm holds to what it boasts is to look at their records. Have they received any awards? Do they have good reviews? Even if they have a wealth of money, they may not serve their clients well.
If you choose to work with a wealth management firm, it may be one of the most important financial decisions you’ll ever make. Because of that, it should be decided carefully. After all, you’ll be paying for this level of treatment. Get to know the firm’s past and current success as well as their future goals.
If it’s a new firm, however, you may have to lean more heavily on the first two points.
The Main Point
Choosing a wealth manager is mostly about choosing the right person, at the best price, with good credentials. It’s a big decision to partner with someone to manage your finances. If you choose the wrong person, it could be disastrous. If you choose the right one, it could change your life and your future for the better.