Every investor’s financial situation is different, but some situations are more alike than others. Greater wealth may provide access to a broader scope of investment options, but it also means you likely face more complex financial management.
The broad and complex needs that come with higher wealth are why the financial industry has a separate division that works with high-net-worth investors. Financial advisors and entire firms, sometimes called wealth advisors or wealth management firms, are dedicated to addressing the needs of these wealthier individuals. But how can you find such an advisor for higher wealth? Experts have a few tips on what to look for and where to look:
— Do you need an advisor for higher wealth?
— What to look for in an advisor for higher wealth.
— Where to find an advisor for higher wealth.
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Do You Need an Advisor for Higher Wealth?
Before you can start searching for an advisor to meet your needs, you need to know what you’re looking for. “The first step for high-net-worth investors should be identifying personal goals and finding advisors who can best help them do so,” says Steve Wittenberg, director of Legacy Planning at SEI Private Wealth Management.
Consider what is prompting your search, he says. Are you going through a significant transition, like a business transaction, or a personal life event like a birth or divorce? Or perhaps you’re just a former do-it-yourselfer who wants better support. Whatever the case may be, your reason for finding a wealth advisor can help you determine which advisor is best for you.
What to Look for in an Advisor for Higher Wealth
Also consider features of the advisor’s practice, such as location, fee structure, investment performance or strategy, service model and technology when making your choice, Wittenberg says.
“Look for an advisor who is proficient beyond just choosing investments for an individual’s portfolio, but an advocate for your entire financial picture,” says Belinda Herzig, national senior wealth strategist at BNY Mellon Wealth Management.
Higher wealth means you’ll likely need myriad services beyond just investment management, such as estate planning, charitable giving, tax planning and insurance. Your advisor should operate as part of a team because no one person can do it all, Herzig says. “If you have people who are unwilling to collaborate with the entire team of bankers, accountants, attorneys and insurance professionals, you should tread cautiously.”
One key tip she shares is to demand that one member of the team, with the banker or investment manager, act as a quarterback to coordinate the team of professionals. “This lead advisor should be adept at monitoring tax policy changes that affect income tax planning as well as wealth transfer tax planning,” Herzig says.
Make sure the advisor is a fiduciary, Wittenberg says. Only fiduciaries are legally required to put your best interest first at all times, something that is particularly important when you’re looking for more holistic services. Fiduciaries will operate on a fee-only model, charging for advice rather than earning commissions on the products they sell.
In addition to the above, Wittenberg also recommends looking for advisors with:
— On-staff certified financial planners, or CFPs, and other subject matter experts in estate and gift taxes, trust planning, income tax planning and philanthropy.
— A process for consulting with other experts and helping clients weigh their options before making decisions.
— Expertise in succession planning and asset protection, including life insurance and casualty and property insurance.
— A formal relationship with a corporate trust company to take care of trust administration and serve as a corporate trustee to protect your assets.
[Read: How to Find a Financial Advisor if You’re Not Rich.]
Where to Find an Advisor for Higher Wealth
Once you have an idea of what type of advisor you’re looking for, it’s time to start your search. One place to start is your bank, Herzig says.
“I get asked this question a lot because many of our clients are either looking for new representation or have outgrown their existing group of advisors,” she says. “We become a great resource to begin the conversation because at BNY Mellon Wealth Management we work with many accountants, attorneys and insurance professionals across the country.”
Other financial professionals can also be sources of referrals. If you already have a CPA or attorney who you work with, you might start by asking him or her for the names of advisors who work with higher-wealth clients. Many attorneys with high-net-worth clients have advisors they’ve worked with in the past, says Patrick Simasko, elder law attorney and financial advisor at Simasko Law.
Your lawyer and accountant are also likely familiar with your financial situation, so they should be able to give you a suitable recommendation.
“The best advisors are leaders in their field and, with a couple calls for references, you should keep landing on the same small group of talented individuals with experience working with similarly situated clients,” Herzig says.
[READ: Do You Need a Financial Advisor or an Accountant?]
You can also get recommendations from friends, family or peers with similar goals or needs to yours. “When you start asking your friends or business associates, you will start hearing the same professionals’ names over and over,” Simasko says.
Another place to look are organizations such as the National Association of Estate Planners and Councils (NAEPC), which provides a searchable database of local estate planners. Note that not all accredited estate planners are also financial advisors, but you’re likely to find at least a few in your area with both credentials. Look for AEPs with the CFP, ChFC (chartered financial consultant) or MSFS (master of science in financial services) designation, or who indicate they work at a financial planning firm.
Wittenberg suggests “looking for an advisor that attends Estate Council organizations or describes themselves as a UHNW wealth manager or multi-family office.”
Simasko says it’s also important to learn the right questions to ask when you meet with an advisor. Questions such as: How long have you been handling higher-net-worth clients? How successful have you been? Have any of your clients been audited?
Once you have a list of potential candidates, Wittenberg suggests creating a list of questions to ask each one, so you can more effectively weigh your options.
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Estates, Trusts and Gifting: How to Find an Advisor for Higher Wealth originally appeared on usnews.com
