Questions to Ask a Wealth Manager

Choosing a wealth manager is an important decision. The firm may eventually have responsibility for a substantial part of your savings and could influence your retirement, family planning and financial security.

An introductory meeting should therefore be treated as an opportunity to assess the firm, not simply as a presentation in which the wealth manager explains its services.

Who Will Manage My Wealth and Be My Main Point of Contact?

Ask who will be your main point of contact and whether that person will attend future review meetings.

In some firms, the person conducting the initial meeting is not the adviser who eventually manages the relationship. This is not necessarily a problem, but it should be made clear.

Ask:

• How many clients does the adviser currently serve?
• How long have they worked at the firm?
• Will I have direct access to them?
• Who supports them?
• What happens if they leave?

Continuity can be particularly important in a relationship expected to last for many years.

What Experience Do You Have With Clients Like Me?

A good wealth manager does not need to have dealt with someone whose circumstances are identical to yours. However, relevant experience can be valuable.

For example, business owners may need help preparing for a sale and managing a sudden increase in liquid wealth. Retirees may need careful withdrawal planning. International families may face complex tax, residency and currency considerations.

Ask the firm to explain how it has helped clients with similar objectives without expecting it to disclose confidential information.

How Will You Assess My Financial Goals and Investment Risk?

Risk should not be assessed through a questionnaire alone.

The wealth manager should discuss your ability to withstand losses, your investment timeframe, future spending requirements and emotional response to market volatility.

Ask how the firm would change its recommendations if your circumstances altered. Your portfolio should be connected to your financial plan rather than based solely on a generic description such as “balanced” or “growth”.

How Will the Wealth Manager Invest My Money?

Ask for a clear explanation of the investment philosophy and portfolio construction process.

Useful questions include:

• Do you use individual securities, funds or both?
• How diversified will the portfolio be?
• How do you choose investments?
• Who approves changes?
• What benchmark will be used?
• How often is the portfolio rebalanced?
• Do you attempt to time markets?
• Can ethical preferences be accommodated?

The answers should be understandable. Complexity does not necessarily indicate sophistication.

What Wealth Management Fees and Charges Will I Pay?

Ask the firm to state all anticipated charges in both percentage and cash terms.

This should include investment management, financial planning, custody, platform and underlying investment costs. Ask whether there are separate dealing, exit or foreign exchange charges.

You should also understand whether fees reduce as the portfolio becomes larger and whether additional services carry separate costs.

MoneyHelper recommends comparing the overall cost and understanding whether the adviser charges a fixed fee, an hourly rate or a percentage of the assets involved.

How Have Your Investment Portfolios Performed?

Request long-term figures for a portfolio comparable with the one being proposed.

Ask whether returns are shown after all charges and how performance compares with both the relevant benchmark and inflation.

Also ask how portfolios behaved during difficult periods. Downside protection can be as important as participation in rising markets, particularly when you are drawing an income.

What Financial Planning Services Will You Provide?

Establish whether the firm will analyse your wider financial position or merely manage a portfolio.

Will it produce cash-flow forecasts? Review pensions? Help structure withdrawals? Consider inheritance planning? Coordinate with your accountant and solicitor?

Ask how often the plan will be updated and whether this work is included in the ongoing fee.

How Will My Investments and Assets Be Held and Protected?

Ask which custodian will hold your assets and whether they are kept separately from the wealth manager’s own money.

Confirm the firm’s regulatory status independently using the FCA Financial Services Register. The FCA recommends checking the contact details and permissions of both firms and individuals before proceeding.

How Do I Choose the Right Wealth Manager for Me?

Finally, ask the wealth manager to explain why its service is appropriate for you specifically.

A convincing answer should relate to your needs rather than relying on the firm’s size, awards or history. The best meetings should leave you with a clear understanding of the proposition, its cost and the people who will be responsible for your wealth.