How to find the best investment advisor near me? As an ultra-high net worth individual, it’s essential to maintain and grow your wealth. But who do you turn to when you need investing advice? Whether you’re looking for analysis on stocks, bonds, and mutual funds, or you want someone to manage your complete investment portfolio, an investment advisor is usually the best person for the job.
Here’s what an investment advisor does, what makes them so special, and how to select the right one for managing your hard-earned assets.
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What is an investment advisor?
Investment advisors go by several different names. You might know them as an asset, wealth, portfolio, or investment managers. But no matter what their official title is, they usually oversee a set number of financial services for multi-millionaires. Sowhat is an investment advisor? There are several things to discuss what you should know about these investment professionals.
As stated earlier, there are numerous names that investment advisors go by. Regardless of the title, investment advisors are people or groups that help high net worth individuals analyze and select securities, manage their wealth, and plan for their financial future. If you need assistance deciding between assets classes for effectively growing or maintaining your wealth, then an investment advisor is the person you turn to for help.
It’s important to note that investment advisors offer a wide variety of services. When someone is managing your money, you should always select the right investment advisor that offers the level of service you need.
If you enjoy managing your own finances for instance, you might want to work with an investment advisor that has a narrow view. For instance, the right investment advisor for you might specialize in only the technology sector or have extensive knowledge about dividend-paying stocks.
But what if you’re looking for an advisor with a more holistic approach, that can help manage all your finances? Well, there are investment advisors that focus on investing for the stage of life you’re in as well.
They might have a different title (in this instance, investment advisors focused on a wide range of services are wealth managers), but even though these two individuals have different skill sets, they can both be referred to as “investment advisors.”
So, what is an investment advisor exactly? Now that you know there are different people that go by the moniker of “investment advisor,” it’s easier to learn what they are by differentiating, while explaining what they can do for you.
The textbook definition of an investment advisor is any person or firm that receives compensation for giving investment advice or securities analysis. Some of them follow this definition perfectly by providing investment reports, while taking a back-end approach to money management.
Other investment advisors however take a hands-on approach to working with their clients. This type of investment advisor will also manage your investment portfolio and with your authorization, many will even purchase investments for you without requiring your approval for each transaction. The type of investment advisor you choose to work with really depends on the complexity of your wealth management needs.
Investment advisors are grouped into two categories. First are the registered investment advisors. A registered investment advisor can be an individual, but most often it’s an investment firm that holds this designation.
Second are the investment advisor representatives. These are the advisors that work for a firm, who provide you with financial services. They can be financial planners or brokers, who might have less of an obligation to do what’s in your best interest. So, it’s important to note this difference while selecting the investment advisor that’s right for you.
It is worth noting that while the investment advisor definition is restrictive, in practice, it is quite the opposite. They can help you plan for major purchases, find you financing, connect you with business services you require, among other things.
Consider them a multi-tool to help you make the best financial decisions for the long-run nature of your generational wealth, especially if you have $10+ million in assets.
Is there a difference between investment advisors and financial advisors?
What makes a registered investment advisor different from a general financial advisor? Firstly, your general financial advisor, commonly referred to as a broker, can sell you securities if it matches your needs as a client.
As an example, if you bring up the need to increase your retirement investing, then a broker can recommend something that matches with your current request. Investment advisors, on the other hand, can bring up any aspect of your financial situation, plan for, and recommend you make specific investment decisions.
Secondly, brokers do not have a fiduciary standard requirement. Using the above example, a broker can suggest you purchase a certain investment for retirement, since that is one of your current needs. However, the security they suggest might not be the ideal investment for your situation. Instead, it can simply be suitable given the circumstances, or worse…
In some cases, a broker may suggest you purchase or sell an investment, not based on whether it’s ideal, but instead if it earns the broker a commission.
And that’s a pretty major difference between financial advisor brokers and registered investment advisors. Instead of being able to suggest a suitable option, registered investment advisors have a fiduciary duty to act in their client’s best interests.
That means they will suggest or make changes to your investment portfolio only when they believe it will provide you the best returns out of all other options. They have an obligation to serve in your best interests among all else.
So, why is it important that an investment advisor had a fiduciary duty while managing your money? If the registered investment advisor actively manages your portfolio, then they’re usually controlling anywhere from $10 million to $200 million of your assets. Therefore, they need to protect and grow your funds in a way that discloses both risk and conflicts of interest to you.
In fact, when an investment advisor registers to become a registered investment advisor, they’re legally obligated to only take actions that are in your best interest.
How are investment advisors regulated?
You might wonder why fiduciary duty is so important to registered investment advisors. It all comes down to the word “registered” in their title name.
Generally, once an investment advisor manages $25 million in assets, they register with their state government. Whenever the firm or person reaches about $100 million in assets managed, they’ll register with the Security and Exchanges Commission (SEC).
It’s important to note that not every state requires those with $25 million in assets managed to register. If you’re considering an investment advisor from a state where registration isn’t mandatory, then check whether this representative or their firm has registered.
To get the official designation of a registered investment advisor, they’ll need to have passed the Series 65, Uniform Investment Advisor Law Examination or an equivalent exam. After passing the exam, the SEC requires several additional obligations that will help protect your investments.
In addition to having a fiduciary obligation and disclosing conflicts of interest, investment advisors also must explain the suitability of an investment to you and the SEC when requested. This means that your registered investment advisor will keep detailed documents on investments they purchase on your behalf and explain how these assets match with your needs and level of risk.
Do I need an investment advisor?
Whether you need an investment advisor depends on several factors. As someone with a high net worth whose portfolio is in the range of $5 million to $500 million, it’s in your best interest to consider an exceptional investment advisor.
That’s because when you’ve accumulated anywhere from $5 millionto $500 million, management of your finances can quickly become complex. You can try to manage this amount of wealth for yourself, while focusing on diversification, tax liability reduction, and several other factors.
But many times a professional is going to achieve better returns with your assets, while you will leave net gains, tax, and other ways to improve your generational wealth on the table.
When asking “what will a good investment advisor do for me” at your level of wealth while deciding on which professional to select, you’ll likely want someone that offers comprehensive financial planning. With your level of wealth, there will be several investment opportunities available to you.
An investment advisor that understands the entire range of securities options, instead of one that focuses on just one niche will likely provide you with the best service. If you’re still considering whether you need an investment advisor, then get advice from a proven wealth management team. A free consultation can help you decide on whether an investment advisor is right for your family.
What will a good investment advisor do for me?
A common question that people ask while considering wealth management services is “what will a good investment advisor do for me?” Although it really depends on your financial situation, here are a few things you can expect your investment advisor to assist you with:
- Analysis of ALL financial assets you are considering including in your portfolio, including real estate, commercial business, investment portfolio, and private assets.
- Purchasing, selling, and monitoring investments in your portfolio to meet your investment priorities.
- Building a wealth management plan based on your risk profile, current, and future goals.
- Explaining and mitigating risk of different asset classes you are investing in.
- Helping you lower taxable income liability for the current and future tax years.
And plenty more. If you are curious about hiring the best registered investment advisor near me, be sure to look for professional investment advisors.
What should I look for in an investment advisor?
There are several things you want to look for in an investment advisor. The question, “which of the following is not something you should consider when evaluating an investment advisor” is equally as important of a question. Here are the things that should and should not impact your decision.
The first thing you must know while selecting an investment advisor is whether they will act as your fiduciary. When someone is managing any amount of your wealth, you want them to act in your best interest. This is especially important when they’re managing between $5 million to $500 million of your family’s assets.
Second, you’ll want to have an understanding of your advisor’s specialty and their investment strategy. If you’re considering all investment classes, you don’t want to get stuck with an advisor that only knows dividend-paying stocks.
Likewise, if you only care about dividend-paying stocks, then you won’t get very far with a generalist. You’ll also want to be certain that your advisor isn’t conservative when you’re trying to invest aggressively, and vice-versa.
Third, an advisor that is compensated fairly based on your needs. As someone with an ultra-high net worth, it’s common for investment advisors to charge a percentage of your managed assets. However, some investment advisors charge a flat rate, while others earn a fee per task.
Make sure that you understand each advisor’s compensation package, so that you know whether there could be a potential conflict of interest. Often, aligning your interests with your investment advisor can be a beneficial relationship for both in the long-term.
Which of the following is not something you should consider when evaluating an investment advisor?
There are also several factors that seem important while selecting an investment advisor, that shouldn’t influence your decision. So, which of the following is not something you should consider when evaluating an investment advisor? Here’s what’s not so important to base your decision on.
- The order in which you interview investment advisors. You might like the first person you speak to, or you might not. Conduct enough interviews to get a feel for several different investment advisors before selecting one.
- The company an advisor works for. Just because someone works for a large investment firm does not mean they are ready to handle your money. You want to select an advisor that’s a good match for your family’s needs, not because of their association with a well-known company.
- Certifications that do not mean much. There are plenty of accreditations that simply show the advisor has done some basic test knowledge, but in practice, many investment advisors have built the same skills over decades of experience.
Suggestions while hiring the best registered investment advisor near me.
As you can tell, there are several considerations while deciding on an investment advisor. There is yet another factor to consider and that’s whether you need a local advisor. Here’s why hiring the top investment advisor near me is the correct move.
One of the top reasons for hiring a local advisor is the fact that you can meet with him or her in person. It’s easy to forgo face-to-face connections these days. But there will be times where you want to meet with an advisor in person. Of course, this might not always be possible if an advisor you want to work with isn’t down the street, but it is a nice benefit to consider.
Larger firms might have several people managing various aspects of your investment portfolio. However, with a local firm, you’ll know who exactly is accountable with your investments, and they’ll be focusing on you and your family, instead of thinking about climbing up the corporate latter in a large corporation.
It’s these considerations that make all the difference when it comes to managing your wealth.
Are you looking for professional help managing your wealth?
There’s a wide variety of services that investment managers perform. When you need someone to manage your family’s wealth, turn to a professional investment advisor that has a proven record of accomplishment while maintaining and growing large investment portfolios.
If you need assistance finding the right financial advisor in your area, there are plenty of places to find help.Visit this page to get in contact with our founders at Pillar Wealth Management.