Choosing a financial adviser or wealth manager? Here’s how to decide.


  • Wealth Manager or Financial Advisor? That could depend on how much you have to invest.
  • But when looking for financial help, there is much more to consider.
  • You should ask about the adviser’s education, investment strategy, and commitment to your best interest.

You have money you want to put to work, but you’re not sure where to start. The first thing to consider is how much investable money you have.

If you’re just starting out and have a few hundred, thousands, or tens of thousands, you can first visit a financial advisor to start a financial plan. However, if you have several hundred thousand dollars, you may need more individualized investment advice and management and seek out a wealth manager.

Wealth managers not only keep an eye on your financial roadmap to make sure you stay on track, they can also help you with advanced tax management, integration with complex compensation plans, the most advanced estate planning, a charitable and even legal donation. considerations, which are not normally necessary until you reach a certain level of assets.

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People starting out with a financial advisor often need more specialized wealth management. However, that may not require you to switch to a new advisor. Some professionals who refer to themselves as financial advisors may still do what wealth managers do, so talk to your advisor first.

Education and loyalty are the most important.

Whether you decide to go with a financial advisor or a wealth manager, there are a few crucial things to understand about the industry. Your most important decisions about whom to employ should be based on your knowledge and responsibilities.

“Insist that your investment professional have a certification, not a license, that evidences a higher degree of education,” said Ronald Rhoades, director of the personal financial planning program at Western Kentucky University’s Gordon Ford College of Business.

Even that is easier said than done because there are hundreds of certifications, but he recommends looking for advisors who are certified financial planners or licensed financial analysts. Both require passing a rigorous exam on topics such as financial planning and investments.

He also wants someone who is “honest and upfront about how they are compensated and what (their) incentives are.” said Michael Finke, director of the American College Granum Center for Financial Security.

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Tips for finding an advisor who is honest and loyal to your needs:

  • “I Auditioned More Than One” Finke said. “Don’t go alone with the brother-in-law who may or may not be the adviser you’re looking for.”
  • Look for written confirmation that you are working with a fiduciary. Fiduciaries are always required by law to act in the best interest of the client. Some advisers may work for a large company like Fidelity that requires them to be fiduciaries in investment advisory services, but not as brokers executing trades. So make sure you understand your agreement. A non-fiduciary advisor may recommend investments or products that pay them a higher commission, that would cost you more, instead of those that would serve you better. “When conflicts of interest are numerous or severe, avoid the relationship,” Rhoades said.
  • Ask for a commitment to the “prudent investment rule.” That It requires the manager to diversify, minimize fees, and balance income production and capital appreciation. All 401(k)s already fall under this rule under the Employee Retirement Income Security Act, but “most investment accounts, including many IRAs, require the portfolio manager to have only a ‘reasonable basis’ for investment decisions,” Rhoades said. “By enforcing the prudent investment rule, a much greater degree of skill is required.” In general, any adviser who actually adheres to these higher standards should have no problem assuring you in writing.
  • Ask what strategies are being used to minimize long-term taxes on your returns.
  • For those who already have investment advisors, consider seeking a second opinion every two years..
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“The fact is that investment portfolio management, done right, requires a high degree of skill and experience,” Rhoades said. “A great designer and portfolio manager often has years of education and experience before they get really good at it.”

Medora Lee is a money, markets and personal finance reporter at USA TODAY. You can reach her at [email protected] and sign up for our free Daily Money newsletter for personal finance tips and business news Monday through Friday mornings.


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