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How To Find a High Net Worth Advisor

How To Find a High Net Worth Advisor

26 Sep 2022

When high net worth investors start to become more financially savvy, they often realize that they need a financial advisor. But where do you find one? Finding a trustworthy wealth manager can be a daunting task. Locating a suitable candidate is not as simple as Googling “high net worth advisors.” 

First, you have to find someone who will internalize your specific situation and goals. Second, you need someone that also is experienced and knowledgeable about the industry. We have prepared some tips for finding the right person for the job.

This article discusses the following:

  • The advantages of working with a fee-only advisor
  • Why you need to identify your personal financial goals
  • What a wealth manager’s investment strategies may reveal
  • The benefit of thoroughly researching your candidates
  • How a solid grasp of tax law can be beneficial

1. Hire a Fee-Only Advisor

If you opt to work with a fee-only advisor, they will charge a flat fee and will not need to earn commissions or kickbacks. This is because they do not sell financial products of any kind, so conflicts of interest between the client and the advisor are far less likely.

Fee-only advisors are sometimes more flexible about their compensation, as well, because they are not required to sell certain products or charge a percentage of your assets under management (AUM). In fact, many do not accept AUM fees at all because this would require them to recommend investments paying out those fees in order for them to earn enough money from their clients’ accounts.

  • Fee-only advisors charge a retainer fee, which is an annual flat rate that pays for the advisor’s services.
  • Fee-based planners charge by the transaction. For example, they might charge $100 to create a retirement plan or $200 to complete an estate plan.
  • Hourly planners will typically bill you anywhere from $150 -$250 per hour (or more).
  • Project-based planners will often have set projects that cost between $1,500 and $5,000 each (but can vary widely).

2. Discuss Your Financial Goals

The next step is to review your financial goals. These should be specific, measurable, and time-bound. You may want to include a list of the pros and cons of achieving each goal. Make time to discuss whether or not the proposed portfolio allocation is consistent with your risk tolerance and financial situation with your advisor-to-be, as well.

3. Review The Advisor’s Investment Strategies

When you review an advisor’s investment strategies, make sure they are using a diversified portfolio. They should not be investing in individual stocks or bonds. Instead, they should be using low-cost index funds and tax-efficient strategies to grow your assets.

The next step is to ensure that the portfolio is appropriate for your goals. For example, if you want to retire soon, it will not do for your advisor to have invested in growth assets like stocks or mutual funds when those assets could have been better used elsewhere (such as paying off debt).

McGervey Wealth Management specializes in full-cycle investing. In other words, we favor closely monitoring global and domestic markets and economic environments. Based on this data, we strategically allocate your portfolio to the best sectors and asset classes (as determined by whether we are currently in a growth or inflationary period). 

4. Verify Their Understanding of Tax Law

In addition to helping you invest your money in a way that is consistent with your values and goals, a high-net-worth advisor can also help you ensure that your allocations are tailored to minimize taxes. The reality is that the tax code is complicated. In fact, it can vary depending on the type of investment, its risk level, and its yield (or return). 

For instance, stocks tend to grow faster than bonds over long periods of time. However, they are also more volatile, so if you sell them at the wrong time, there could be substantial losses. Investing in alternative assets like real estate can provide steady returns over time, but the tax planning process requires careful management.

5. Conduct Your Due Diligence 

As a high-net-worth investor, you need to be discerning about who is allowed to work with your wealth. There are many trustworthy financial professionals out there. However, unfortunately, there are many wolves in sheep’s clothing, as well. This makes it vital for you to conduct due diligence.

Take the time to ask or research:

  • Are they a fiduciary? This means that they are legally obligated to put your best financial interests ahead of their own at all times (even if it should cost them money of their own). Those who breach this duty (and the firms that employ them) can be fined millions of dollars. 
  • Do they have an AUM in excess of $100 million? You want someone who has experience managing large sums of money. However, just as importantly, you want someone who has successfully introduced new products into the market, guided clients through difficult situations (such as divorces), founded companies, and more. As a matter of fact, McGervey Wealth Management has similar experience, certification, and fiduciary character that you can rely on. 
  • Are they independent or are they affiliated with any investment company? Independent registered investment advisors (RIAs) tend to be far freer from potential conflicts of interest than someone who is the local representative of a vast global firm. Your advisor should suggest an asset because it could profit your financial life; not because a higher-up wants stock in a company the same firm also owns pushed on you.

6. Choose Wisely

an Ohio financial advisor hand shaking a Ohio high net worth investors hand

Wealth managers are a critical part of successful financial planning, and finding the right one can make all the difference. As you look for a financial advisor, make sure to ask about their investment philosophy, credentials, fees, and other factors that will help you determine if they are right for you.

If you apply these steps and still feel uncertain as to whom you should work with, consider asking friends or colleagues for their recommendations. You might also ask family members if they have any thoughts. 

However, we are convinced that your ideal choice is McGervey Wealth Management—and we are happy to explain why, in detail. Contact us today and see why our clients may say we provide the best high-net-worth financial planning in Akron-Canton, Ohio.

 

 

 

More About the Author: Matthew McGervey, CFP®, MBA

As a CERTIFIED FINANCIAL PLANNER™ professional, Matthew has a broad knowledge of personal financial planning strategies and solutions.