Your advisor is your personal contact and captain of your wealth management strategy, but it’s important that he or she is backed by a strong team. That’s why it’s critical to look beyond your individual advisor and learn about the entire firm.
A cohesive team with depth and breadth of knowledge makes your advisor—and their advice—even more valuable. It also helps ensure that you’ll never be left adrift in the case of advisor turnover. Promotions, job offers at different firms and retirement are natural events in an advisor’s career. If the person serving you moves on, you want to be sure that they’ll be replaced with someone you can trust. If you’ve selected a firm carefully, other professionals in the office will already know who you are. They’ll have some knowledge of your family’s situation, and they’ll be prepared to pick up where your advisor left off.
Here are some important qualities to look for in an advisory firm:
A Firm-Wide Fiduciary Commitment
When assessing how a firm approaches its overall responsibilities, considering how seriously it takes its fiduciary duty tells you a lot about their commitment to you. A firm’s fiduciary designation can help give you confidence in their practices, so consider seeking a firm that has earned the CEFEX Seal of Excellence.
A Strong Team
Great advisors don’t work in isolation. They have a team of other experts to tap whenever they need more information on a complex subject. Look for firms embracing a team approach so your advisor can pull in expertise from across the firm.
The CEFEX Seal of Excellence is an accreditation for investment fiduciaries established by the Centre for Fiduciary Excellence. CEFEX certification is a rigorous process that includes regular auditing by a team of expert analysts who ensure a firm adheres to the industry’s best practice standards. The audit involves a voluntary review of client records and processes. When you work with a firm that’s CEFEX certified, you can feel confident about their practices. View Plancorp’s CEFEX Certification.
Here are some of the specialists you’ll want to see in a firm:
- Investment experts, including a Chief Investment Officer or investment committee, with access to the best investing data and research
- Tax experts
- Estate planning experts
- Specialists focusing on retirement plans and exit plans for business owners
- Specialists in family offices for managing multi-generational wealth
It’s also helpful to look for a firm that routinely hires younger advisors, so you know there will be someone to take over your relationship if your advisor retires or gets promoted. If the average age of advisors at the firm skews older, make sure you also know the firm’s succession plan.
How to Ask an Advisor About Their Team
Ask these questions when you interview advisors to learn more about the firm and whether it takes a team approach:
- Who else would be helping manage my wealth besides you?
- What resources do you have available it I have special financial needs such as selling a business or managing complex investments?
- Who are the firm’s key decision-makers?
- Will others in the firm know my situation or work with me personally?
- What’s the average age of the firm’s advisors?
- If the firm is small or has mostly older advisors, what is the firm’s succession plan?
Service & Communication
Many people seek a new advisor when they realize they aren’t getting enough attention from their current one. A good firm will stay in regular contact with you and ensure you get prompt service and answers to your questions. Here’s the type of service and communication you should expect:
- Regular meetings — and availability when you need them. Whether they’re semi-annual or quarterly reviews, your advisor should meet with you on a regular basis to review your financial plan. But significant events that alter your financial course can happen any time, so it’s important you can meet with your advisor outside of those regular meetings, too. Maybe your family is growing, your parent needs long-term care, or your business partner decides to part ways. These are all situations where you may need to revisit your financial plan immediately, and your advisor should be available to help you work through important decisions without waiting until your next scheduled review.
- Ongoing communication. In addition to meetings, you should expect frequent and accessible communication from your firm. Whether it’s by email, phone or video, your firm should check in often. When big, life-changing things happen, you might think to call your advisor. But sometimes circumstances change, and the potential financial impact doesn’t come to mind. That’s why your advisor should continuously monitor your plan throughout the year and reach out to discuss adjusts, so it remains a living reflection of your changing circumstances.
- Contact with firm leaders. Another sign of a good firm is one that offers regular interaction with the firm’s decision-makers, like the CEO, the Chief Investment Officer, and the Chief Planning Officer. These executives shouldn’t be strangers—you should have the opportunity to see and talk to them throughout your relationship with the firm. That open line of communication keeps them in touch with your experience as a client at the firm, and it gives you an opportunity to share your thoughts and opinions with the people in power.
- Advanced tech support. Look for a firm that combines the best of the human touch and technological support, so you can access the information and advice you need quickly and easily. A firm that uses sophisticated financial tools, such as Monte Carlo simulations, can help you determine your plan’s likelihood of success. Online access to your accounts can help you quickly and conveniently access up-to-date information whenever you want.
How to Ask an Advisor About Service and Communication
- How often do you conduct regular review meetings?
- How can I get in touch with questions, and when can I expect a response?
- Will you be available for additional meetings if needed?
- How often should I expect to hear from you or the firm?
- Will I be able to meet with firm executives like the Chief Investment Officer or Chief Planning Officer?
- What kinds of information updates will you provide throughout the year?
- How can I check my accounts?
Resource:
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Disclosure:
This material has been prepared for informational purposes only and should not be used as investment, tax, legal or accounting advice. All investing involves risk. Past performance is no guarantee of future results. Diversification does not ensure a profit or guarantee against a loss. You should consult your own tax, legal and accounting advisors.
