Wealth Advisor to Help in Handling the Sudden Wealth Transfer

Introduction

A wealth advisor is used to refer to an individual or a firm that provides finance related advice to people or corporate agencies. These advises help in attaining the financial goals set by the client. They look into several aspects of finance management which include, tax payment, assets management, analyzing of risk factors in investments and even retirement planning. Earlier anyone who is well versed with the investments scenario could become a financial planner, but recently investors are looking for more proficiency and only those with a proper certification are preferred in the industry.

Know When you Need a Financial Advisor

In most cases, it is noticed that people rush to wealth advisors when a risk situation comes up. When a person suddenly acquires huge wealth and has to manage this asset all by himself, it spooks him out and makes him find some help in managing the situation. Sometimes a person who has been handling his wealth faces a stage in life where the fear of making a huge irreparable mistake haunts him and he looks for a wealth manager for advice. Sudden acquiring of wealth by a person who has never dealt with money more than a few thousands will be troublesome for the person to handle. This can be due to an acquired ancestral wealth or lottey. People who are looking to retire with a huge sum in hand try to consult with a financial advisor so that his money stays for a longer time. A good financial planner can help in investing in a proper retirement investment.

Some people feel that they have enough knowledge about financial planning, investment opportunities, overseeing risks and evaluating them. Such people make the mistake of not hiring an investment planner. But experts suggest that even though the association need not be a long term one, every investor will benefit from an association with a financial planner before investing and in case of risk situations. Smart investors who are well versed with the investment industry will still hire a planner to ensure better returns.

Sudden Wealth Syndrome

A person will sure feel elated when a sum of more than six digits suddenly comes into your pocket. This will bring along with it enough stress and it is known as Sudden Wealth Syndrome. A stressed person can end up misutilizing the money and end up in a worse situation than when he acquired the wealth. Facing this jackpot in the right spirit can help to save every penny and make the most out of the sudden wealth acquired.

Handling the Sudden Wealth Stress

• Sudden wealth can come in with some acquired ancestral wealth, on winning a lottery or an event. The first step is to know the amount that you have to work with. If there is paperwork involved, then make sure that you sign them only after proper examination of the legal clauses as you do not want to fall into troubles later. If you have a proper planning at this stage, then you can employ a wealth advisor so that he can help you in examining the loopholes in the documentations.
• When you have to handle huge sums, it directly means business and running a business on your own is not practical. So you will have to search for professionals who will help you in your venture. Put down your requirement on paper and check with friends and family for referrals to begin with. You can then analyze these references by checking their client database. There are several resources that will provide you with background information about the professionals. You can skip this step if you already have a reputed financial planner who works with you. Else you can even employ a wealth advisor who can help you in the further procedures. Scrutinize your investment planner on several parameters before employing one.
• With the acquiring of wealth, the outlook should change from sufficiency to captaining the amount and making it last. A long term financial and life plan has to be created. With a good wealth advisor, you can get your customized financial planning to meet your family requirement and ways to develop your business. Have a clear view of the income expected and living standards.
• The biggest enemies when you acquire wealth is your friends and family as there will be some jealous elements out there. There will also be unexpected legal issues to face where family members will come up with threats. Keep all loopholes closed and take help from a legal advisor when required to ensure safety of your family and yourself.
• When sudden wealth comes in, people make the big mistake of spending extravagantly. The first steps can be to clear any debts and probably a small holiday, but big expenditures can cause major damages. One has to understand the need to save the money for the future generations and for the old age times. With the right advice at the proper time, such abrupt expenses can be easily avoided. Dropping the amount into investment can yield huge benefits in a year and this returns can be used for expenses based on the returns value, keeping the principal amount untouched.
• The life after retirement is something that worries most people. A wealth manager will be able to make proper planning for the retirement life so that one is not left to the mercy of children and grandchildren who acquire the business.

Conclusion

Stepping into a new world with a huge sum of money can be rather luring for any individual. But the wise man will face the challenge and act like a steward who will carry forward the legacy and the acquired amount for the next generation. A committed wealth advisor can help in handling such situations to decide the further actions to make the most out of the acquired wealth.

Determining the Value of the Investment Manager

Introduction

When you have to hire an investment manager, the first and foremost factor that you would look into is the previous performance of the manager. The investment manager will also present a composite presentation of his past records which complies with the Global Investment Performance Standards. This is more like a clubbing of all the portfolios that was managed by the investment manager. Potential investors check this composite data and make the decision of evaluating the manager. But there are several other factors to be considered in addition to the performance.

Composite Performance Presentation

When the investor has to choose the management agency for its investments, it is necessary to know how to read the composite presentation and understand the values mentioned. This will give a complete view of the portfolios attended by the investment manager. You can check the returns from each portfolio and the returns ratio. This will also have simple data like the fee schedule, firm asset value and the policies followed. With this composite presentation, it is possible to know the skilled managers and differentiate them from the lucky ones who have a few good turnovers to its credit.

Services like Lipper and Morningstar also publish the performance ranking of investment managers. Experienced investors understand that there is no direct correlation between the previous performance records and the expected future fund handling. A comparative study of the returns in a few years against the returns for another set of years of the same length can prove beneficial in getting an average performance information of the investment manager.

Investment Philosophy of the Manager

When you are accessing an investment firm or an individual, the philosophy followed can provide you with crucial information. A certain style may work at a time and might not prove to be that efficient at another times. But the philosophy and strategy will be consistent factors and this will help in evaluating the skill of the investment manager. On close examination, the logical reasoning capacity of the manager can be understood based on a transaction that was done to prevent risks.

Sometimes when a certain investment strategy is in trend, you will be able to see that even the average investment manager will have created a good benchmark and returns. But when the trend changes, the investments collapse. Only a skilled manager will be able to meet such a change in market trend with a quick risk free move to save the investment.

Implementation of the Investment Philosophy

Every investment manager works on the basis of a certain philosophy. This philosophy is combined with the data received from the research of the market scenario to come up with ways to implement the strategy. Investment process constitutes this implementation of the philosophy. The philosophy is mostly followed by the whole team and on examining the process, it is possible for the investor to understand if the particular investment manager moves out of track from the basic process. Sometimes this deviation from the basic philosophy might be related to the market research data provided to gain some good profits for the short term benefit factor. When you have to evaluate a certain fund process, you can either request for information from the company or check the fund prospectus.

Team that makes the Investment Decisions

As in any other business enterprise, it is the combined work of the team that decides the success of the plan. The plan is prepared and executed by the members of the team who pool in important information to help in preparing and implementing it. There will be both strong and weak professionals in the team and the managers in the top positions decide on the changes to the investment decisions so that the strong professionals are utilized and the weaker ones are succumbed or dismissed. Sometimes an investor who analyzes the performance alone will end up with an investment manager whose successful team has left the firm. Without the efficient team which had worked to produce the high performance, the manager will be left with no good feedback and employees to ensure the safety of your investment.

Factors used by Analysts to Value the Investment Manager

Statistical data are used by analysts to create complex data that evaluate the proficiency of an investment manager. These values might seem complicated to an average inexperienced investor. But with a little effort a non-professional investor can use this data to come to a conclusion regarding the investment manager. There are also softwares like Wilshire and Zephyr which allows to measure these statistical data. For example, Alpha is the comparative value of the performance of the manager against the risk taken. If the investment manager has been able to create returns using his own skills then he will have a positive Alpha value and if the returns has gone down on a good market day it will show as a negative alpha value.

Other Deciding Factors to Analyze the Investment Manager

When you have an investment requirement, it has to be researched if the manager has dealt with similar accounts. This data will help you to know if the strategy and risk analysis followed by the manager will suit your account requirement. A change in firm ownership and employee structure should also be considered as the previous performance data may be pertaining to that firm structure and the new one might not be as efficient. In case you have noted minute under performance issues, the manager should be able to provide proper reasoning. If he/she is not able to give a reasoning then it is a red flag.

Conclusion

With the current chaos in the market, all investors are looking for professional help to make sure that their investment gives proper returns. Evaluating and hiring an investment manager is a crucial decision and comparative websites like www.findawealthmanager.com can help towards this. The site can suggest the best rated and matching investment managers from their database of more than 60 finance management institutions. Performance data has to be connected and studied along with the philosophy, process and people of the firm to get the proper value of the investment  management firm.  

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.

Private Wealth Management and its Increasing Popularity

What is Private Wealth Management?

As the name suggests, the planning and management of finances of private individuals is known as private wealth management. This is also known as family office. The financial adviser for private wealth will be entrusted with the job of taking care of the wealth of the individual and enhancing it with proper investments and accounts system. The clients are mostly private individuals who have a ultra high net worth. They also have financial goals that has to be achieved and this is handled by the management company or advisor.

Who offers wealth management service to individuals?

Large banks have several financial schemes for individuals that will help them to make wise investments. But the successful and popular individuals do not have the time to look into these schemes and they entrust the job with wealth managers. They manage all the finances of the high net worth individuals. The manager once employed by the individual will have to understand the financial goals of the person and help attain the same. The basic investment strategy will be explained to the client and henceforth the advisor will carry out all investments in the interest of the investor based on the strategy discussed.

Why is there a need for Family Offices?

The concept of private investment advisors has gained popularity recently and the current estimates state that there are about 3500 families which rely on private investment managers to handle their finances. Looking at the situation years back, it can be found that affluent American families had entrusted their finances with banks and trusts. But the result received from these were not satisfactory. In the new system, all the money matters of the family is handled by the family office which takes care of the money allotment, charity funds, insurance, tax, business investment and wealth transfer to generations.

What are the different kinds of Family Office?

Sometimes a single family will employ a range of experts like tax planner, accountant, bookkeeping staff and investment advisor. This team will work for the specific family taking care of the financial activities. With single family offices, the purpose is to serve a single wealthy family with the team. But the cost of maintaining a SFO can be too high and can even go up to $2 million per year.

Multi family offices work more like the traditional wealth management companies. They will have several wealthy families as clients and the team works on investments in top notch companies. There are yet different kinds of clientele. The simpler ones will just require the multi family office to take care of the bookkeeping and accounts management of the family which may be worth below $1 billion. For individuals who have a net worth value above this will require the agency to take care of all aspects of finance handling.

Responsibilities of the Private Finance Management Office

• Managing the finance of the wealthy family and making the right investments. This ensures that the wealth is maintained and increased over generations of proper planning.
• Real estate investment and investment in direct self owned businesses are also seen as investment methods and this is also handled by the agency.
• With such huge amounts to handle, the family office will keep proper and transparent accounts and bookkeeping and make it available to the family members at any time.
• The agency keeps proper knowledge of the US tax code. All the tax, insurance and trust planning is performed at the right time and carried on in the scheduled manner to prevent any later disputes with the US law.
• Charity givings are very common in US wealthy families. This is coordinated and neatly documented for legal and future reference purposes.
• Wealthy families mostly own a family business. Some family members will be taking care of the business and its operations while others may not. But they do have shares in the business. Improper handling of the business capital can create issues and therefore the family office work as an intermediate keeping records of business management and shares.
• The family office will also take care of the intergenerational conflicts. Such conflicts do arise at some point of time in any family and with wealthy families, it becomes much complicated and a matter of publicity. Such unwanted situations are handled by the professionals in the management agency or even outsourced for a better approach.
• The office also takes care of the education of the younger generation.
• All the various bills, checks, travel packages, purchase and management of property and other day to day financial details are also handled by the agency.

Increasing Requirement for Private Wealth Management Company

In recent times, several factors has lead to the rise for the need of finance management for families and individuals.

• There is a prominent increase in the individuals list under the ultra high net worth class. The wealthy class are attaining more and more wealth and this has added several new names to the list of high net worth individuals. The list now includes people from China, Russia, Brazil and India and this increase has directly reflected upon the increase in demand for family offices.
• With the increase in wealth, the families will look for more reliable services and they are ready to spend a good amount as fees in return for premium wealth management services. The requirement by the wealthy families is to ensure that their enmassed wealth is under the guidance of experienced professionals who can handle it with high profits and low risk factors.
• The affluent class have to manage self owned businesses, properties and their related taxes. Managing all these is not possible on their own and they need a team to work for managing their personal and family finances.
• With such a high pay scale, the individual wealth management offices will offer much advanced services and even add more services according to the requirement. They work in a flexible way and such options are not offered by banks or traditional wealth management agencies.

Conclusion

It is an advantage for wealthy families to get their investments and other finances handled by professionals in the field. Www.findawealthmanager.com is platform which can be used to find the wealth management company to match with the specific requirement of the individual. With the increase of such multi family offices offering service to individual financial needs, the companies will bring up more positive changes in their operation to meet the competition.