The firm that you bring on board will become a part of your life going forward; hence, you need someone who understands your financial needs, expectations, and someone you can have faith in over the long haul.
We routinely engage the services of specialists such as Doctors, Lawyers, Architects, etc. who fulfill a niche the requirement, as well as professionals such as Drivers, Caterers, Personal trainers, Travel agents, and more, who simply make life a lot easier for us.
However, when it comes to money management, most of us shy away from seeking professional assistance. Some of us believe that we can manage our finances on our own. Some of us are wary of sharing financial details with a third party, while others feel paying someone to manage personal finances is a wasteful expenditure.
In reality, a professional wealth management firm, which is knowledgeable and ethical, can help you reach your financial goals through specialized services. In addition, they can also take care of portfolio management, relieving you from the stress of day-to-day monitoring, while also saving precious time.
If you are looking to employ the services of a wealth management firm, here are some factors to keep in mind before you zero in on one.
Understands your financial context
The firm that you bring on board will become a part of your life going forward. You will be entrusting your life’s savings to them; hence, you need someone who understands your financial needs, expectations, and someone you can have faith in over the long haul.
Be sure to enquire about the advisory’s qualifications and experience in dealing with clients similar to you. The needs of every client are going to be distinct, especially those of self-employed professionals. Doctors, Lawyers, Chartered Accountants, etc. have very busy schedules, and rarely have the time to appropriately manage their money.
Offers contextual solutions
Many contemporary digital wealth management firms spend a considerable amount of time understanding the client’s personality, goals, and inherent risk appetite. Recommendations they make factors, not just the goals but also the risk-taking ability of individuals.
Additionally, wealth management serves a much broader function than just investment management. Good wealth managers make the effort to understand and optimize every financial detail.
For example, in addition to personal investments, Doctors may be looking to add business equipment or may be involved with a philanthropic initiative. The wealth manager should be able to design a separate portfolio that allows the client to save systematically for the asset without taking undue risk, as well as gain tax deductions for their charitable incidentals.
Similarly, Lawyers and CAs work for different clients and on billable hours; hence, their income stream may not be consistent. A financial expert should be able to identify areas where the expenses can be better managed and cash flow utilized efficiently. They should suggest different paths for different goals and help improve your money management habits for a financially secure future.
Bouquet of products and services
A wealth management firm that offers a wider array of services amidst the ever-changing economic and financial landscape will be more effective in helping you reach your financial goals. You want an advisor that is not just adept in investment management but can also offer other value-added services such as recommendations to best manage your tax liability, help on other financial decisions, or will creation services.
This allows you to get an umbrella of services at one place at a relatively discounted price and helps you grow and safeguard your finances for the next generation.
Service quality, fee, and charges
It is imperative that you get an insight into the firm’s service model before making the final decision. Make inquiries about the firm’s quality of service. If your wealth manager isn’t there for you when you need them, it is no better than a sales business.
Opinions regarding advisory fees can vary from one person to another. While many firms recover their service cost via commissions from the products they recommend, others may charge a percentage fee calculated basis value of the portfolio. You can decide what works best for you depending on what you are comfortable with.
If your advisor or platform is not making revenue, it is for sure a red flag. Either they will sell your data or try selling you products that you do not need. In the worst case, they might just fold up because of an unsustainable business model. It is difficult to trust a platform or provider that cannot manage their own finances.
Wealth management firms don’t take over your finances; they only offer their expertise that simply improves your chances of financial success. It is eventually your money and your decision to heed the advice and make the investment.
Once you find the right fit, the wealth the management firm can stay with you through your entire financial journey, just like a family Doctor or Lawyer.
By, Prateek Mehta, Co-founder and CBO, Scripbox