How to Compare Wealth Management Companies

Introduction

In the current market condition, the situation is that of chaos, with investors ending up with severe loss situations and money being lost to fraudulent people. The term 'Madoffed' has become a common usage these days. Amidst this situation going into an investment is seen with high risk factors. Investors who are looking to pool in more than $1 million in investment have problems trusting their financial advisor. But the problem still remains that the investors are not well versed in the field to make crucial investment decisions. There are no trust guarantees, but with a planned approach the investor can compare wealth management companies to make the decision of whom to settle with in your investment business.

A weak investor is likely to be fooled soon. So be a strong and responsible investor and present yourself strongly to the wealth advisor and make all advisors, report directly to you. This will make sure that any move that happens with your investment amount passes only through you. Some people do the mistake of handing over all responsibilities with the financial advisor and letting them perform all operations as the investor does not have enough knowledge about the investment industry. Your money is your responsibility and any issues that comes to your investment amount will have to be faced by you and therefore it has to be ensured that the intermediates handle your money properly. Here we have compiled some criteria by which you can compare wealth management companies.

1. Never decide by the Price Factor

People make the mistake of judging the wealth management company by the price offered. But what importance would be there for paying a few pennies if you do not get the value for the money spent? Make a note of the service provided by the company and the price that they quote. Enquire about how often will you be updated about the progress of the investment and what is going on. Approaching like a boss demanding for information rather than a client outlook can help you get the most out of the financial advisor.

2. Check the advisor background

When you take a new employee into your company, the first think you will be analyzing is the criminal and legal records of the person. The same applies when you are deciding on an investment advisor. There are several ways by which you can check the track record of a financial advisor and Finra.org can be a starting point in this research. All informations about the registered company, the brokers, firm details, licenses and exams passed can be obtained from the website of the Financial Regulatory Agency.

Firms that handle investment above $25 million are listed under the Securities and Exchange Commission and the investment advisor details will have all crucial informations like the clients of the advisor, fees charged and legal actions history. There are also other databases about the companies and advisors which can be gained from cfp.net and fpanet.org websites.

The note about the comparison will have the details like background, work experience, certifications and other qualifications.

3. Check with the Previous Clients

When you are planning for an investment, you will have several people coming up with suggestions and recommendations on the basis of their personal experiences. These can be considered when you are doing a comparison. But it should not be the deciding factor. When a person provides reference to a certain financial advisor, his requirement would have been different from yours. You should have a proper idea of your requirement and then check with clients who have the similar situations. They will be able to provide information about the communications and code of conduct of the financial advisor.

4. Payment Method- Fees of Commission

Different investment advisors prefer different modes of payment. The payment mode will help you know the interest of the advisor. Ask the advisor to be transparent of how they deal with the payment. They would require to be paid as fees, commission or based on the size of the portfolio. There will also be other who charge on an hourly basis. You can cross check the payments to find if there are any loopholes left and check the payment structure in detail.

5. Track Record of the Advisor

Track record can be requested from the wealth management company. This will help you create a note of the number of cases that has reached the benchmark and how many of them are about to reach the goal. You can even check for the success of cases similar to yours and especially during recession times which will show how efficient the company is. This performance record will give you an insight into the decision making capacity of the advisor.

6. Ask for Written information

When you have your money put at stake, it is necessary to ask for written statement of the plan and the fees. A proper framework can be requested from the advisor to achieve the investment goal. This will include the financial products, strategies plan and the benchmarks. The advisor should also agree to work in the interest of the investor and in attaining the goals.

After you compare the wealth management companies, you can make the important decision of choosing the best financial advisor for your investment dream.

Experts suggest that even if you are paying huge sums to your investment advisor, you can still ask for suggestion from other professionals. When you face a situation where you have to cross check on the investment move suggested by your advisor, you can probably check with an expert. In this turbulent industry, each move has to be stepped in carefully and double checked to prevent any downfalls.