Valuable insight into how to maximise a first meeting with a wealth manager by asking the important questions

This was an audience question in a recent event we hosted to help women more readily engage with their wealth. For those of us in the industry, the key questions would likely roll off the tongue but prospective investors embarking on the wealth management journey would be forgiven for feeling somewhat daunted by the plethora of services and providers on offer...  

Indeed, the sad fact of the matter is that many people do not even know how or where to find financial advice. According to a recent survey from one of the UK’s largest providers, Openwork, 62% of women and 38% of men did not know how to find financial advice.

When prospective investors find themselves ready to talk to a private wealth manager, it is critical they make the most of that time by asking the right questions. Far from being replicas of each other, firms can specialise in different client types, offer different service styles and have contrasting philosophies on how to optimise their clients’ wealth.

With these differences in mind, choosing the right service provider becomes a more complicated process than simply picking the one that charges the least for its services. The graphic opposite highlights eight key questions to ask prospective wealth managers.  We have expanded on four questions, which specifically arose in our recent event.

1. What is the size of the firm?

Wealth management companies range from small boutiques to large operations tied to major investment banks and asset management houses, so it is essential to have a good understanding of any organisation that could be handling your savings. Useful areas to examine are when the company was established, who owns it and whether it is independent. Independent companies often have considerable ‘skin in the game’ – that is to say, they invest a considerable amount of their own savings and that of their family’s in their own offering – so their investment objectives are often more aligned to that of your own.

2. What is the turnover of people in client relationship roles?

It is important to know the average tenure of key relationship managers. A high turnover could create issues around continuity of service levels. By its nature, investing is about the long-term and supporting that with a consistent and constant point of contact works extremely well. It is also worth questioning whether your main point of contact will be a client relationship manager or an investment manager?  The former implies they are dedicated specialists whose sole focus is on managing your money.

3. What is your investment track record?

Whilst past performance is not a guide to future returns, potential clients should ask a wealth manager for an assessment of their historical investment performance alongside, ideally, a hard copy of this track record for additional evidence. It can help to determine how they have performed through volatile conditions. Also, it is crucial to ask if the data shows the performance net of fees – that will give you a more realistic idea of the returns you can expect. Many will use benchmarks as a way of determining if they are underperforming or outperforming, but others are likely to take a less binary approach, i.e. return over cash.

4. What are your fees and how will they affect my investment?

Finally, and arguably most importantly, find out exactly how much a wealth management business will charge and why these charges have arisen. You are well within your rights to do this – under new European regulations, wealth managers are required to produce a full breakdown of the fees and costs new investors can expect.  

An important area of focus is transaction costs. The extent to which investment managers buy and sell portfolio holdings will directly affect transaction fees, so high volume trading can act as a significant drag on performance.

Prospective investors are well advised to do some simple preparation ahead of an initial meeting with a wealth manager or financial adviser. Hopefully the suggested questions above will be of assistance and ultimately help people to make more informed decisions about optimising their wealth.


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