How to Choose a Wealth Manager

Choosing a wealth manager requires careful consideration because the relationship may continue for many years. The right firm should be capable of managing your investments, addressing your wider financial needs and communicating with you in a way that creates confidence.

A glossy presentation or well-known brand should not be enough to determine your decision. A structured selection process is more likely to lead to a successful outcome.

Define Your Financial Goals Before Choosing a Wealth Manager

Start by listing your priorities.

These might include investing a substantial cash balance, preparing for retirement, creating a regular income, consolidating existing investments, managing the proceeds of a business sale, reducing inheritance tax exposure, helping children or grandchildren, or obtaining a second opinion on an existing portfolio.

Identify which objectives are immediate and which are longer term. This will help you find firms with the right mix of investment management and financial planning capabilities.

Decide Which Type of Wealth Management Service You Need

Some clients need discretionary investment management, under which the manager makes day-to-day decisions within an agreed mandate.

Others need a financial adviser to create a plan and recommend investments, but are comfortable approving changes themselves. More complex clients may want a fully integrated wealth management service covering investments, pensions, tax planning and family considerations.

Ask each firm to clarify exactly what it provides. The term “wealth management” is used broadly and does not guarantee that financial planning is included.

Look for a Wealth Manager With Relevant Expertise

Consider whether the firm regularly works with clients in circumstances similar to yours.

An entrepreneur selling a business may have very different needs from a retired couple relying on their portfolio for income. Trustees, international families and senior professionals with complex remuneration may also require specialist knowledge.

The firm should be able to explain its relevant experience without disclosing information about other clients.

Evaluate the Wealth Manager’s Investment Approach

Ask how the firm would invest your money and why its approach is suitable.

You should understand:

• the intended balance between shares, bonds, cash and alternatives;
• whether the firm uses active or passive investments;
• how portfolios are diversified;
• who makes investment decisions;
• how risk is monitored;
• what benchmark will be used; and
• how the portfolio might behave in difficult markets.

Do not select a wealth manager purely because it recently produced the highest return. Strong past performance may reflect additional risk, and it cannot guarantee future results.

Understand Wealth Management Fees and the Complete Cost

Obtain a full written breakdown of charges.

This should include financial advice, investment management, custody, platform, product and transaction costs. Ask for the estimated annual total in pounds based on the amount you expect to invest.

Also establish what services are included. A more expensive firm may provide comprehensive planning, while a cheaper service may offer investment management only.

The relevant question is whether the total package represents value for your circumstances.

Assess Your Relationship With the Wealth Manager

The quality of the adviser-client relationship can be just as important as the firm’s investment process.

During introductory meetings, consider whether the adviser listens carefully, asks thoughtful questions, explains matters clearly, acknowledges uncertainty, avoids unnecessary pressure, and appears interested in your wider objectives.

You should feel able to discuss sensitive family and financial issues openly. Personal trust cannot be established from performance data alone.

Check the Wealth Manager Is FCA-Regulated

Before proceeding, verify the firm and relevant individuals through the FCA Financial Services Register or Firm Checker. The FCA advises consumers to check that contact details match and that the business has the permissions required for the services it is offering.

Ask how your assets will be held and which organisation will act as custodian. You should also understand the complaints procedure and what regulatory protections may apply. Such protection will not compensate you simply because investments fall in value.

Compare Wealth Managers Before Making Your Decision

Meeting two or three carefully selected firms can help you recognise meaningful differences in service, investment philosophy, costs and culture.

Use the same questions in each meeting and record your impressions soon afterwards. A simple scoring framework can help, but the final decision will also involve judgement.

Choose the wealth manager that demonstrates a clear understanding of your circumstances, offers an appropriate and transparent service, and gives you confidence that it will act as a reliable long-term partner.