There are many putting the term wealth manager on their marketing material these days. In a recent Investment News article entitled “Poll: Few Advisors are ‘real’ wealth managers” points out that only 6.6% of those calling themselves wealth managers really are. Isn’t it just another name for a stock broker or something? How is a wealth manager different from financial planner? Is there a difference? If so what are the differences and how can I tell if I need one and what a good one looks like?

The term “wealth management” came into vogue in the early 2000’s. Those who began using the term (White Oaks Wealth Advisors being one of them) were looking to differentiate themselves from an increasing confusion in the marketplace for financial advice. One aspect of this differentiation is about the types of services themselves and the other is about “who” the services are best suited for. While there is a fair amount of crossover in the services offered total wealth management is exemplified by those who offer not only investment advice but also include cash flow, income tax, wealth transfer, and charitable gift planning. These services are often the core elements of a financial plan. That leads us to the later aspect, “who” the services are best suited for. Wealth Management services are best suited for those individuals and families with of $1,000.000 of net worth or more and have a need and/or desire to delegate some of the ongoing responsibilities for managing the resources to meet specific goals and objectives. Those seeking one time advice or a checkup on how they are doing may likely best be served by doing a comprehensive financial plan.

Many wealth managers have processes and procedures in place to manage complex issues related to the establishment and management of trusts, assisting with complex employee stock option decisions, family wealth transfer issues both on an emotional and financial basis, family enterprise challenges and many more topics.

There are no laws about who can use the term wealth manager in their marketing materials. How can you find a wealth manager and which one is a good fit for you? We suggest the following:

  1. Ask for referrals from friends, relatives, colleagues and professional contacts. If you sense a genuine excitement from someone you know and trust these individuals should certainly be on your short list.
  2. If you need to identify more individuals here are a few resources to investigate further:
    1. The Paladin Registry.
    4. Financial Planning Association.
  3. After you have identified a few names “google” the firms and the individual’s names. Do this BEFORE making any calls. If you find something you don’t like better to eliminate early than waste your valuable time. Also you should check the names against the SEC database to determine if there have been any disciplinary problems with the individuals you are researching. There is also a great checklist for interviewing an advisor here.
  4. Go to their web sites. See evidence of their values and how they work. Of course, this is their marketing material and it should be viewed skeptically but it will give you some insights as to who they are and their value proposition. You’ll likely get some ideas for good questions as you review. Is the description of services consistent with what you are looking for? Do they work with the same types of issues and the level of wealth that will bring good results for your situation?
  5. Schedule an introductory meeting. It is common practice that these meetings are complimentary in nature but it is always a good idea to ask. Your investigation to this point has probably put some questions in your mind to ask. The National Association of Professional Financial Advisors has published a list of questions to ask. You can use it to fill in any gaps you might have. A part of this process is to ask about costs. Fee only advisors are considered by some to have fewer conflicts of interest. They receive no commissions and their firms do not manufacture product as a key source of income. There are many quality advisors working in firms that do potentially pay commission but be sure you are getting what you want. We also have a free white paper on the cost of a financial advisory relationship that is available without cost or obligation. Click here for the paper. Be aware that fee based and fee only have very different meaning in the financial advisory business. Fee only means “no third party compensation” at all. Fee based means a fee will be charged on this service but other services may be charged a commission.

If you like what you have found out so far and have a finalist in mind it is appropriate to ask for references etc.

The foregoing content reflects the opinions of White Oaks Wealth Advisors and is subject to change at any time without notice. Content provided herein is for informational purposes only and should not be used or construed as investment advice or a recommendation regarding the purchase or sale of any security. There is no guarantee that the statements, opinions or forecasts provided herein will prove to be correct. All information or ideas provided should be discussed in detail with an advisor, accountant or legal counsel prior to implementation.

Past performance may not be indicative of future results. Indices are not available for direct investment. Any investor who attempts to mimic the performance of an index would incur fees and expenses which would reduce returns.

Securities investing involves risk, including the potential for loss of principal. There is no assurance that any investment plan or strategy will be successful.