When you have more wealth, you usually have access to a broader scope of investment options, but you also likely have more complex financial needs. 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.
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 selling a business, or a personal life event like a birth or divorce? 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
“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 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 adds. 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.
Many fee-only models use an assets under management, or AUM, approach where you’re charged a percentage of the money you have invested with the advisor. These structures are often provided on a sliding scale with lower fees applied to higher AUM, so this can be an advantageous structure for higher-net-worth investors.
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.
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 begin 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.
Since your lawyer and accountant are already familiar with your financial situation, they should be able to give you a suitable recommendation.
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.
“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.
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 (ultra high-net-worth) wealth manager or multi-family office.”
Once you have a list of potential candidates, Wittenberg suggests creating a list of questions about the advisor’s practice and experience working with higher-net-worth clients to ask each one, so you can more effectively weigh your options.
More from U.S. News
Update 06/08/22: This story was published at an earlier date and has been updated with new information.