Let's talk about how to choose a wealth manager. When choosing a wealth manager, you should look at the wealth manager's designations and who they typically help.
Do they have expertise in the areas that are important to you?
For example, if you're a small business owner, does the wealth manager have experience working with business owners or entrepreneurs?
Next, you should schedule a call with a wealth advisor to do a "gut check." It's critical that you feel comfortable speaking with your wealth manager as they will be your guide for many years to come. Ideally, you’re seeking someone with whom you’ll have a long-term relationship. They will be guiding you through all your most important financial milestones, so it’s critical that you feel comfortable with them.
After your initial meeting with a wealth manager, you'll typically do a follow-up meeting to discuss the potential of working together and what that would look like. Once you've done your due diligence, you'll either move forward or keep looking.
Keep reading for more details on how to choose a wealth manager that will be a great fit for you and your family.
This is an important decision and shouldn't be taken lightly.
Table of Contents
What Is a Wealth Manager?
A wealth manager is a professional who typically provides a range of financial services, including investment management, estate planning, tax planning, and retirement planning advice.
Wealth managers are a type of financial advisor, but unlike traditional financial advisors, they work with high-net-worth individuals. If you have $1M more in investable assets, you are likely a good fit for a wealth manager. You will be able to take advantage of the suite of services that they offer and get value from their guidance.
While some wealth managers only work with clients who have $1M or more in investable assets, many wealth managers also cater to clients who have $500K or more in investable assets.
Every wealth manager and wealth management firm is different, so be sure to find out which services a particular firm offers as well as their client minimums and cost structure.
What Does a Wealth Management Firm Do?
A wealth management firm typically provides a range of financial services to business owners, entrepreneurs, and other high-net-worth individuals.
Wealth management firms aim to have a holistic view of your overall wealth and your existing and future financial goals. Because of this, their services generally encompass four pillars — financial planning, estate planning, tax planning, and investment management.
However, it should be noted that not all wealth management firms handle all of these aspects in-house. Some may outsource estate planning or tax preparation to external professionals.
The scope of services varies by firm, and you should confirm which services are included versus referred out.
Selecting the Right Wealth Management Firm
In the US, there are many wealth management firms from which you can choose. So, which one is the right one for your needs?
Wealth management firms are all different. Some have more experience with individuals that have a net worth of over $10M, while others offer niche services like wealth management for athletes. Every firm is different, so be sure that you find a firm that works with clients whose situations are similar to yours.
Because you’ll be working closely with your wealth manager to map out a financial plan and identify personal finance goals, you’ll want to be careful when choosing the right firm.
Here are some tips to help you in your search.
1 - Identify their ideal client
Most wealth management firms will have client testimonials on their website or their Google Business Profiles, but you can always ask them about the typical client the firm works with.
This will give you an idea about their expertise and who they are best suited to help. Do they have experience that aligns with your needs?
Keep in mind that online reviews can provide insight, but they are not always reliable indicators of expertise or performance. Client confidentiality often limits what can be shared, and online reviews might not reflect the complexity of the advisor's services.
So, while checking reviews is important, be sure to prioritize verifiable credentials and in-depth conversations over online reviews.
2 - Compare the services
Some firms will offer a wide range of services, but if you’re only looking for 1-2 main services, like estate planning and investment management, it’s worth finding a firm that specializes in these areas.
If you're a business owner or entrepreneur, make sure that your wealth management firm has experience working with people in similar situations to yours.
3 - Understand the costs
Wealth management firms typically charge a client based on a percentage of assets under management.
You can typically expect to pay a wealth manager between 0.65% and 2% of managed assets annually, which should include comprehensive financial planning services.
Typically, the greater the assets under management, the lower the cost. A skilled team actively managing your portfolio can seek opportunities for further returns in the market, helping your financial strategies adapt to the increasing complexity of your assets over time.
4 - Check their reputation
How are their online reviews?
Do they have any industry awards or recognition? Have you taken a look at their SEC record or looked for them using FINRA's BrokerCheck? How long have they been in business? Who is the owner of their firm?
You can check a Registered Investment Advisor (RIA) with the SEC’s Investment Adviser Public Disclosure (IAPD) database; however, brokers and certain advisors fall under FINRA, which requires checking BrokerCheck instead.
You’ll be trusting your wealth to the hands of a wealth management firm, so it’s best to double-check their credibility beforehand.
Key Questions to Ask a Wealth Manager
What are your qualifications?
Whether you are looking for a registered investment advisor or a certified financial planner, qualifications and years of experience should be considered.
How are costs structured? How do you get paid?
Understanding your costs upfront is important. This allows you to evaluate whether their service is providing the benefit you want.
How will we work together?
If you want to schedule meetings (virtual or in-person) to stay in regular contact, find a wealth manager that offers this. Some advisors will offer meetings at least once a year while others may meet quarterly.
Make sure that the way they work aligns with your needs.
What is your investment philosophy?
Each wealth manager will have a different approach to investment. Their investment philosophy will have an impact on how your investment portfolio is managed, so a compatible philosophy is recommended.
Evaluating a Wealth Manager’s Expertise
There are several ways to evaluate a wealth manager’s expertise — by their client base, assets under management, years of experience, specialization, and credentials.
In the US, the credentials to look for are Certified Financial Planner (CFP®), Chartered Financial Analyst (CFA®), Certified Private Wealth Advisor (CPWA®), and Accredited Investment Fiduciary (AIF®). Other credentials, like Certified Investment Management Analyst (CIMA®), are generally used by wealth managers in more specialized wealth management firms.
Ultimately, your wealth manager should bring value. By using their professional experience and knowledge, they should be consistently helping you pursue your financial goals.
Checking If Your Wealth Manager Is a Fiduciary
A fiduciary is legally bound to act in your best financial interests, so it’s important to check if your wealth manager is a fiduciary before working with them.
It's critical that you receive transparent advice from your advisor.
Fiduciaries may operate on a fee-only or fee-based basis. Fee-only advisors do not receive commissions, while fee-based advisors may earn commissions but must disclose potential conflicts of interest and always act in the client’s best interest.
A genuine fiduciary will be able to confirm their commitment to operating in your best interests through a signed document.
Common Questions about Choosing a Wealth Manager
What are wealth management services?
Wealth management firms often provide comprehensive financial planning, including investment management, estate planning, tax strategies, and retirement planning.
The goal is to take a holistic view of your financial situation and tailor strategies to preserve your wealth. Wealth management services are especially important for high-net-worth individuals or families with complex financial needs.
How much does working with a wealth management firm cost?
Wealth management firms typically charge based on a percentage of assets under management.
Additional services, like estate planning or tax preparation, may incur extra fees if outsourced. Confirm all costs upfront to ensure transparency and value alignment.
Should I work with a fiduciary financial advisor or a wealth advisor?
A fiduciary financial advisor is legally bound to act in your best interest, whereas some wealth advisors may not operate under fiduciary standards.
It’s ideal to work with a fiduciary to ensure you get client-focused advice, especially when managing complex wealth portfolios or planning for long-term financial goals.
360 Financial is a wealth management firm that operates within a fiduciary environment allowing you to get tailored advice and all the services you need.
How much does working with a financial advisor cost?
The cost of a financial advisor varies, typically ranging from hourly fees, flat rates, or a percentage of assets under management.
Costs depend on the advisor’s expertise, service scope, and whether they operate under a fiduciary standard.
Summary of Key Points
A wealth manager seeks to help high-net-worth individuals accumulate, preserve, and transfer wealth. They usually work for a wealth management firm.
When choosing the right wealth manager to work with, check their experience, credentials, and services offered. See if they align with your needs and financial goals.
To minimize conflicts of interest to get customized and transparent advice, ensure your wealth manager is a fiduciary beforehand.
Wealth Management in Minnesota
At 360 Financial, we are here to help you with your big picture planning and wealth management needs.
You’ve worked hard to become successful, and you deserve experienced guidance in seeking to ensure your assets are protected. We’re here to help you pursue your most important financial goals and build a lasting legacy.
Based in Minnesota, with clients in Minneapolis and across the United States, we specialize in helping successful people manage their big picture financial goals through our wealth management, financial planning, and estate planning services.
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About 360 Financial
360 Financial is an independent wealth management firm with a team of specialized financial advisors and financial planners. As fiduciaries, 360 Financial’s advisors provide services to business owners, entrepreneurs, and professionals. We help investors with sudden wealth, retirement planning, tax planning, estate planning, and business financial planning.
Headquartered in Minnesota, we serve investors across the US with online and in-person wealth management and financial planning services.