If you have made your first million dollars, congratulations! They say the second million is a lot easier to earn. But for now, you have probably come to realize that your money can no longer simply live in a bank. To make the most of it, you will need to enter the frightening world of wealth management. Fortunately, a good wealth management advisor can put you on the road to success, creating a diverse portfolio and trading as needed to maximize your investment. Here’s what you need to know to choose the right advisor for you.
Good wealth management advisors may have a diverse client list. Still, everyone has their preferences, and you should focus on finding an advisor whose preferred client is you. Ask about the average portfolio size, demographics, and other key details about their clients. This can help you understand where the advisor’s expertise and preferences are, and whether they fit with your needs.
You may be in the market for a specific product right now, such as investing advice. However, at some point you may need help with estate planning, tax advice, or other services. A good wealth manager offers an array of products and services, allowing you to take advantage of different areas of focus as your needs evolve and change.
Also look at the available portfolio options. You want someone who thinks outside the box, not someone who’s only offering the same investment choices as everyone else in town.
Wealth managers get paid in one of three ways. A commissioned broker most likely works for a large firm. He or she makes a percentage of the transaction on every purchase or sale of a security, and then turns over a portion to the firm. A fee-based advisor charges management fees along with commissions. If you decide to use a fee-based advisor, ask for a clear explanation of the fee structure. Fee-only advisors charge either a flat fee or a percentage of managed assets, and do not make extra money from trading.
It is important to note that fee-only advisors have a fiduciary duty to act in their clients’ best interests, while commissioned brokers are only required to recommend suitable investments. While there are certainly skilled and ethical brokers, a fee-only structure gives you the peace of mind of knowing that the only trades are the ones designed to improve your portfolio.
Availability and Communication Preferences
You should feel comfortable checking in with your wealth manager when you have questions or concerns. Find out how often the advisor you are considering schedules client meetings, and how open he or she is to your touching base. Also find out whether it is best to call, text, or e-mail, and about how long it usually takes to get a response.
There are certainly skilled, highly ethical wealth management firms that aren’t out winning awards. But if everything else seems equal, dig into the company’s background. Special recognition, numerous positive reviews, and other signs that the company is doing something right could be enough to choose one advisor over another.
Ultimately, your wealth manager should be someone with whom you can form a long-lasting, trusting, professional relationship. Choosing the one that is right for you can help to grow and preserve your wealth both now and for your future heirs.
CORDA Investment Management, LLC, is an investment advisory firm that provides wealth management services for clients nationwide. CORDA’s headquarters is in Houston, and the firm also has offices in Austin and Dallas. If you are ready to begin a long-term professional relationship with a proven investment firm, please contact CORDA today at https://cordamanagement.com or by phone at (855) 439-0665.