If you are considering seeking professional financial and investment advice, what are the questions to as a financial advisor? As a high net worth or ultra-high net worth individual, with considerable assets and a large investment portfolio, managing and protecting your wealth can be difficult. The financial situations of wealthy people can be complex, especially when managing your wealth on your own. If you have an investment portfolio of $10 million and above then this is a great guide to download, and you will likely need the services of a financial advisor to protect and grow your wealth. However, you must select the best financial advisor that suits your investment needs and peculiar financial situation when selecting a financial advisor. This means that you need to ask your financial advisor some important questions. These questions will help you determine if the financial advisor is the right fit for you.
In this article, prepared by Pillar Wealth Management LLC, you will learn the pertinent questions that you need to ask your financial advisor in order to determine if they are the right fit for you. Pillar Wealth Management LLC is a wealth management firm that caters to high-net-worth and ultra-high-net-worth individuals who have between $5 million and $500 million in liquid assets. Suppose you would like more information on managing your considerable wealth and large investment portfolio. You can schedule a free no-obligation consultation call with the co-founders of Pillar Wealth Management, Chris Snyder, and Hutch Ashoo. They can help you determine how best to manage your wealth.
Table of Contents
How will our relationship work?
One of the most important questions that you need to ask your financial advisor is how your financial relationship will work. The type of relationship you have with your financial advisor depends mainly on the type of financial adviser you hire and the purpose of hiring them.
It is important to note that many financial professionals provide financial advisory services of some sort; hence they are called financial advisors. Bankers, insurance brokers, stockbrokers, and many other professionals in the financial sector all fall within this category. Irrespective of their job title or description, the basic duty of any financial advisor or professional providing financial advisory services is to assist their clients in managing, protecting, and growing their wealth and investments.
However, these professionals do not all do the same thing, so it is vital that you understand exactly what the financial professional you are speaking with does, and compare with your personal needs, to see if there is a match. Let’s take a look at the various professionals that can provide you with financial advisory services.
A financial planner works with you to develop a holistic financial plan to achieve your investment goals. If you work with a financial planner, the major thing that they will do is determine your financial goals and then help you plan a path to achieve those goals. They do this by taking your financial and investment goals and expanding on them to create a comprehensive plan. To do this, the financial planner looks at your lifestyle, your expenses, and what you seek to achieve financially. They will then use the information to draft out a comprehensive plan for your portfolio. If you would like to receive information about improving your investment portfolio, get our free guide, Improving Portfolio Performance: The Shifts Multi-Millionaires Must Make to Achieve Financial Security and Serenity. This guide was prepared by Pillar Wealth Management, a wealth management company that caters to high net worth and ultra-high net worth clients with $5 million to $50 million in assets.
However, as good as a financial plan is, working with a financial planner alone might not enable you to achieve your financial goals. As a high net-worth individual, you will need more than just a financial plan to manage and protect your investment portfolio.
Many financial planners can’t offer you all the services you need, as most of them cannot buy or sell the assets or securities that will help you achieve your plan. This means that you will need at least another financial professional to purchase bonds, stocks, mutual funds, and other investments that will help you achieve your financial goals. Therefore, one of the questions to ask your financial advisor is if they can buy and sell assets on your behalf. Also, most financial advisors cannot provide detailed answers to complex financial questions. If you have questions about your investment portfolio, including how to protect and grow your wealth, schedule a free, no-obligation call with the co-founders of Pillar Wealth Management LLC, Chris Snyder, and Hutch Ashoo.
Another type of financial advisor that you can work with, and arguably the most popular, is a stockbroker. Stockbrokers are financial professionals that help their clients manage their investment portfolios. They are usually knowledgeable about investment solutions that can help you achieve your short and long-term investment goals. At the very least, you will need the services of a financial planner and an investment broker to achieve your financial goals.
This combination can help you build your financial plan and work towards creating an investment portfolio that will follow that plan’s guidelines. If you want more information about how to protect your wealth and investment portfolio, you can order for your copy of our hardcover book, The Art of Protecting Ultra-High Net Worth Portfolios and Estates: Strategies for Families Worth $25 Million to $500 Million. Put together by the team Pillar Wealth Management LLC; it will provide you with strategies for protecting and growing your wealth.
However, this strategy has two major obstacles. The first is that you will need to find two separate professionals to create your plan and see it achieved. This can prove problematic because it means you must do double the work to find the perfect fit, twice. You have to find a financial planner and an investment broker that you feel comfortable working with, and also feel comfortable working with each other. If that synergy is not present, then the whole team can break down, and you do not want the situation where your financial planner and investment broker cannot work well together. Therefore, another question to ask your financial advisor, is if they would be willing to work alongside another financial professional in order to help you achieve your goals.
Another major question to ask a financial advisor is how they are paid. Some professionals who give you advice charge you a flat fee per hour to discuss your financial situation and help you develop strategies to help you achieve your investment goals. Others, such as investment brokers, are paid on commission. This means that they are paid every time you buy or sell an investment asset through them. If your financial advisor is paid on commission, there is a danger that a conflict of interest might arise. For example, a stockbroker can suggest an asset to you for purchase, not because it is the best in that asset class but because it yields a higher commission for them. Unfortunately, if the asset that was suggested moves your portfolio in the direction of your goal, it is likely legal, even if there were better investment options.
This is what happens when your financial advisor is not bound by fiduciary duty towards you. Fiduciary duty means that your financial advisor is bound by law to always act in your best interests. For a business owner to create a wealth management firm company, they must be a Registered Investment Adviser (RIA). This designation is only given after the company owners have passed a financial management exam. They then register with the state that their firm will operate in or the U.S. SEC, depending on the size of the investment portfolio they are managing for their clients.
Therefore, another important thing to ask your financial advisor is if they have a fiduciary duty. If you want to know more about fiduciary duty and how it applies to you, you can schedule a no-obligation, free consultation call with the co-founders of Pillar Wealth Management LLC, Chris Snyder, and Hutch Ashoo.
The last type of financial advisor that we will talk about is a wealth advisor.
Wealth advisors can be professionals that specialize in managing wealth for high net worth and ultra-high net worth individuals. A good wealth advisor will provide the services of a financial planner and an investment broker. They will work with you to determine your investment goals and then work with you to create a plan that helps you achieve them. Then, they will help you put that plan to work by selecting the best
possible investments to help you meet your financial goals. Fortunately, most wealth advisors are bound by fiduciary duty, which means that your relationship with them is entirely in your best interests, and the advisor will always act in your best interests to the best of their ability. If you need more information on finding the best financial advisors, you should get our guide, The Ultimate Guide to Choosing the Best Financial Advisor: For Investors with $5 Million to $500 Million in Liquid Assets. Our team at Pillar Wealth Management LLC specially created the guide and will help you find the best financial advisor to help protect and build your investment portfolio.
Some Questions to Ask Your Financial Advisor
What’s your Investment Philosophy
The results that you will get from your investment portfolio will depend largely on your financial advisor’s investment philosophy. An investment philosophy is defined as a set of principles and beliefs that guides how an investor makes decisions. The philosophy is not a set of laws, but rather a set of guidelines that determine how your financial adviser makes decisions on what assets to invest in and which ones to avoid. There are several popular investment philosophies, some of which include:
Value investing is an investment philosophy where the investor seeks stocks that they believe are currently underpriced by the market, and they expect the prices to rise significantly in the future. The value investing philosophy revolves around picking stocks that are trading less than their intrinsic or book value, which are stocks that are underestimated by the market. The investor purchases these stocks expecting that the value would rise significantly to match the intrinsic value in the future. Value investors believe that the market overreacts to good and bad news, which means that the movements do not correspond to the company’s fundamentals. One of the most popular proponents of this philosophy is Warren Buffett.
This is an investment philosophy where the investors buy the stocks of companies that have products and services with the potential to generate high earnings growth in the future, which will result in higher stock prices. This philosophy is primarily focused on increasing the capital for the investor, and typically involves investing in small or younger companies whose earnings are expected to increase at a rate above their industry or sector average. This philosophy is attractive to many investors because investing in emerging companies can provide extremely high returns if they are successful, but it also poses a fairly high risk as the companies are new and not tested.
Socially Responsible Investing
This investment philosophy focuses on investing only in companies that have practices that align with the investor’s values. These values could include the company’s societal or environmental impact.
This is not an exhaustive list, and there is certainly a case to be made for combining several philosophies. And as you can see, there are several investment philosophies, of which your financial advisor can choose any. Therefore, one of the questions to ask your financial advisor is what their investment philosophy is andsee if it aligns with yours. This is especially important if you have a considerable investment portfolio. If you are a high net worth or ultra-high-net-worth individual, and you have $10 million and above in your Investment portfolio, then get this free guide specifically tailored to your circumstances.
What Asset Allocations Will You Use?
Asset allocation is an investment strategy that tries to balance reward and risk by dividing the portfolio assets according to the investor’s goals, risk tolerance, and investment horizon. The main asset classes that your financial advisor will invest in (equities, fixed income, and cash & equivalents) all have different levels of reward and risk and, as such, behave differently over time.Asset allocation is considered one of the most important decisions that an investor can make. That is, the individual securities that you select to invest in are not as important as how those assets are allocated to bonds, stocks, alternatives, and cash & equivalents. These are largelywhatdetermines your investment results over the long-run.Therefore, you must ask your financial advisor how they plan to allocate your assets and why they chose that allocation system.
Why Pillar Wealth Management is the best financial advisor for your ultra-high net worth assets
If you are looking for a financial advisor,then you should consider PillarWealth Management. With over three decades of experience managing wealth for affluent clients, Pillar Wealth Management is a wealth management firm that offers financial advisory services nationally. They specialize in family financial planning for families that are worth between $5 million and $500 million in liquid assets. Reach out to them today to schedule your free consultation call with our co-founders Hutch Ashoo and Chris Synder, who will help you decide how best to protect and manage your investments. Thank you for reading our questions to ask a financial advisor article.
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