The Complete Guide to What We Do
Good financial advisors can be the difference between you growing your wealth sustainably for many decades and losing all your wealth before you even hit retirement. For high net worth as well as ultra-high net worth families, this difference is crucial because there’s a lot at stake. That’s why if you have $5 million to $500 million in liquid assets, you should be busy searching ‘best financial advisors near me’ and ‘how do I find a good financial advisor?’ The truth is that it’s quite easy to find just any financial advisor. However, especially when you’re a high net worth individual, hiring a good financial advisor is key to your financial success.Only the best financial advisors will truly understand your financial goals and help you get there through the right financial plan. Accordingly, if you want to find out how to choose the best financial advisors, click here to check out our handy guide on the best financial advisors for investors worth $10 million or more.
Pillar Wealth Management is a white-glove wealth management firm offering a wide range of financial and wealth management services. These include investment management, risk management, debt management, retirement planning and tax planning. Our team of experienced wealth managers and advisors are dedicated to helping our high net worth clients achieve financial success. We do this by closely working with our clients to really understand their needs and goals and developing customized financial plans.
In today’s blog, we’ll be discussing the different types of financial advisors, how you should choose one, whether they should be a fiduciary, and when you should get a financial advisor. Let’s dive right in.
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Types of Financial Advisors
Before you get to finding the best financial advisors, it’s important to ask yourself, should I hire a financial advisor or go it alone?If you think your financial situation isn’t that complex, you know precisely how to invest and manage your portfolio, you’ve a solid retirement and estate plan, you’re on top of your tax situation, and you’ve everything under control, you probably don’t need one.
However, this is rarely the case with high net worth and ultra-high net worth individuals. Therefore, for them, it’s probably best to hire a financial advisor. Any fees they end up paying is usually covered by the impressive returns the financial advisors help them rake in. However, as mentioned earlier, finding a financial advisor is easy. However, finding the right financial advisor for yourself is the challenge.
So, before you accept that challenge, it’s important to evaluate exactly why you need a financial advisor. Ultimately, this will help you choose the right kind of financial advisor. Consider how much wealth you have and how much you want an advisor to manage, which services you require the most, how much you can afford to pay, etc. Once you start answering these questions, you’ll be able to determine which financial advisor you should go for. Here are a few common types of financial advisors.
Investment advisors are the type of financial advisors that are majorly focused on investment management. They advise you on which securities and products you should buy and sell. In some cases, they might carry out these transactions themselves, or sometimes, they may simply advise you, and you’ll have to approach someone else to manage the execution. You can find investment advisors at private banks or at independent investment firms.
If you simply need guidance in managing your investment portfolio, you could benefit from an investment advisor. However, remember that portfolio performance is not the only important thing when it comes to wealth management. You can read more about what we mean by this by checking out our comprehensive guide on improving portfolio performance.
Brokers are pretty similar to investment advisors. They also primarily focus on the investment aspect of your wealth, suggesting which securities to buy and sell. Most of the time, they also carry out the buying and selling of the securities on behalf of their clients. The basic difference between investment advisors and brokers is how they are paid.
Investment advisors usually work on a fee-based payment model, while brokers earn commission on every security that you buy and sell. Sometimes, this can lead to a conflict of interest as brokers might push products that earn them higher commissions. This is a frequent problem when dealing with the wrong advisor. You can learn more about such problems and signs by checking out our ultimate guide on choosing the best financial advisor.
Certified Financial Planners
Certified Financial Planners (CFP) go through rigorous training and experience to get their certifications. They hold themselves tofiduciary standards and high ethics. They provide some financial services that don’t need regulation, such as debt management or budgeting.
A CFP usually focuses on developing comprehensive financial plans to help people achieve their financial goals. They are not necessarily that focused or experienced with investment management. They do have knowledge about other financial services, such as retirement planning, tax planning, etc., and might even specialize in a certain field such as estate planning.
These advisors are usually brought on for specific financial issues. Unlike financial planners, they don’t look at all of your finances and simply focus on what they have been hired for.
Accordingly, they don’t necessarily work with clients for long periods either and address their short-term goals only. When going for a financial consultant, make sure you go for a Chartered Financial Consultant (ChFC) as they have a fiduciary duty and ethics to follow. The fiduciary standard is important for advisors as you will learn from this complete guide on financial advisors for investors worth $10 million or more.
Also referred to as portfolio or investment managers, asset managers are usually responsible for managing investment portfolios for their clients. While they can offer some other financial services, they usually don’t. They don’t offer investment advice either, but if they do, you should check if they are registered to do so or not.
Robo advisors are a type of automated financial advisors that offer financial planning or investment management advice through algorithms and mathematical rules. There’s minimal human intervention involved. These advisors are also quite inexpensive, charging almost a quarter of what their human counterparts charge for the same services. On the downside, robo advisors offer almost no personalization and lack any human interaction and therefore, that touch of human intuition.
Wealth managers or advisors are another common type of financial advisors. You will find these at most wealth management firms. Wealth managers usually work with high net worth individuals with $5 million to $500 million in liquid assets. They have a much more holistic approach to financial planning and wealth management.
They have extensive experience in dealing with various financial services, such as investment management, retirement planning, estate planning, and more. They typically offer a full range of financial services that helps them address all of their clients’ financial needs and goals. You can learn more about what they do and how they protect your wealth by ordering a free copy of our book, The Art of Protecting Ultra-High Net Worth Portfolios and Estates – Strategies for Families Worth $25 million to $500 million.
Choosing the Best Financial Advisors Near Me
Evaluating your own needs and financial situation should have given you some idea as to which type of financial advisor you should go for. However, there’s still work left to be done. Now that you know which type of advisor to hire, it’s time to see how to choose the right one for yourself. Here are some of the factors you can evaluate them on.
Experience and Expertise
One of the best ways to judge a financial advisor’s abilities and skills is to see their experience and expertise. Advisors who have been working in the industry for a long time will obviously have more knowledge and expertise over those who’ve just started. The more experienced the advisors are, the better they will be able to manage your wealth and handle your assets efficiently.
Moreover, you shouldn’t just consider their overall experience but their experience in dealing with high net worth and ultra-high net worth clients and their experience with the specific services you require. At Pillar Wealth Management, our advisors have financial experience of more than 30 years, which equips them with in-depth knowledge of the market and industry.You can reach out to us by starting a conversation today.
As you might have realized from reading about the different types of financial advisors, credentials matter a lot too. They can be the difference between a financial consultant and a Chartered Financial Consultant. They can be the difference between an investment manager and an investment advisor. Certain financial services require licenses and regulations, such as investment management. So, make sure you check the credentials, certificates, and background of the financial advisor to ensure that he is licensed to provide those financial services and has gone through the proper training for it.
How the financial advisor is compensated matters a lot as well as this can often lead to problems. In a fee-based payment model, the financial advisors charge a flat fee on the Assets Under Management (AUM), as is the case with some investment advisors and wealth managers. In a commission-based model, advisors usually earn a commission every time they buy and sell a security on your behalf, as is the case with brokers.
With the commission-based model, sometimes brokers tend to start churning or making excessive transactions that earn them more commission and leave you dealing with high transaction costs. Pillar Wealth Management is a 100% fee-only wealth management firm. Click here to start a consultation session with us today.
Conflict of Interest
When choosing a financial advisor, always check for any conflict of interest. This usually occurs when you’re dealing with financial advisors following the fiduciary standard vs. the suitability standard. Advisors following the suitability standard are only obligated to recommend suitable, not necessarily the best, products.
They are concerned with their own interests as well as yours. On the other hand, fiduciary advisors are wholly concerned with your best interests. Besides this, click here to read about the other shifts you must make to maximize portfolio growth strategies from this handy guide.
Should Your Financial Advisor Be a Fiduciary?
In case it wasn’t clear, and you’re still asking yourself, “should my financial advisor be a fiduciary?”the answer is yes. Advisors following the suitability standard don’t lead you towards bad investments. Ultimately, it’s in their best interests to keep you happy with good investments and keep you on as a client for a long time.
However, perhaps between two suitable products, they might not always suggest the best one and rather encourage the one that better serves them. That’s why fiduciary advisors are always the better and safer choice. They don’t suffer from any conflicts of interest and are dedicated to helping you entirely.
At What Point Should You Get a Financial Advisor?
It depends entirely on you and your financial situation. If you think you’re doing a good enough job of managing your finances on your own, you could delay getting a financial advisor. As you progress in your career, start a family, and grow your wealth, you might feel it’s starting to get out of your hands, and then you can get a financial advisor. Besides that, high net worth and ultra-high net worth families should get a financial advisor right away because the sooner you start your financial and retirement planning, the easier it would be to execute it perfectly. Click here to start chatting with one of the advisors at Pillar Wealth Management to start your financial planning journey.
When you find yourself asking, “who are the best financial advisors near me?” You should first ask yourself, “why do I need a financial advisor?”This is because it’s important to find the best financial advisor for yourself instead of finding just any advisor. Only then will you be able to achieve your financial goals efficiently.
Pillar Wealth Management is a 100% fee-only wealth management firm. We have some of the best wealth managers and advisors on board who are always striving to help our affluent clients achieve their financial goals and targets. We offer customized financial plans that best align with our clients’ needs. With a broad range of financial services, our experienced team is well versed in various aspects of wealth management. Click here to reach out to our experienced team by booking a free consultation session.