5 Questions to Ask During your Consultation with a Wealth Advisor

A wealth advisor isn’t a one-size-fits-all service provider. The best wealth advisor to work with is one who understands your specific needs and can help you reach your financial goals.

So how do you determine whether an advisor is the right advisor for you and if applicable, your business? During your initial consultation with an advisor, ask them the following questions. Keep in mind that this isn’t an exhaustive list of questions you need to ask to determine whether an advisor is a good fit for you, but it covers the basics and the answers you receive will provide a foundation for vetting each prospective advisor you meet.

Who is your target demographic?

Different demographics have different needs. For example, if you’re a parent, college planning is likely to be one of the services you need. If your kids are grown, you’re probably more focused on planning your retirement.

Ask the advisor about their clients’ average age range, professions, average assets, and the kinds of goals they’re pursuing. You don’t have to be identical to an advisor’s other clients, but you should be able to see yourself among them.

How do you maintain your relationship with clients?

Working with some advisors is a “set it and forget it” process. Others communicate with their clients more regularly and have clients take a more hands-on approach to managing their assets. Ask the advisor how frequently they check in with each client and how they tend to connect—phone call, email, regularly scheduled in-person meeting, etc.

How are you getting compensated for your recommendations?

There are a few different ways advisors get paid. One is through commissions. The other is through fees. Among this latter category, some advisors are compensated through fees only, while others are compensated through a combination of commissions and fees.

A commission-based advisor receives a small percentage of each sale they make. Generally, this percentage is 3 to 6 percent. These commissions come from the sales of investment products and packages.

When an advisor charges a fee, they might charge a flat fee, an hourly rate, or a percentage of the total value of the assets they’re managing for you. For example, a wealth advisor might charge each client 1  percent of their total asset portfolio’s value. This percentage could also vary between thresholds, with an advisor charging one percentage fee for the first $1 million worth of assets, then a lower percentage for the next million, and so on.

The compensation model that makes the most sense for you depends on what you’re hiring your advisor to do. If you’re only looking for somebody to buy and sell on your behalf, a commission-based advisor can be the most cost-effective choice. If you’re looking for more comprehensive guidance, a fee-based model can provide better value.

Are you just focused on investments, or are you looking at my whole financial picture?

Some clients only work with advisors to optimize their investment portfolios. Others work with advisors to maintain their assets. Still others have different reasons, like planning for the future, operating a business, and ensuring they’re resilient enough to survive downturns.

Many clients need a combination of these services, and the best advisors for those clients are advisors who take a whole-picture approach, rather than focusing on maximizing returns. These advisors consider how actions in one area of your financial life can impact assets in another and suggest courses of action that are overall in your best interest. In contrast, you might be the kind of client who doesn’t need this type of comprehensive advising and would prefer to work with somebody who sticks to investments. In any case, find out how the advisor approaches their role and where they focus their efforts.

What does working with you entail?

Similar to the question above, you want to find out exactly which services a wealth advisor offers before you hire them. Advisors don’t all offer the same things, so be sure to work with an advisor who offers the services you need.

Common services wealth advisors offer include:

  • Asset management
  • Investment advice
  • Tax planning
  • College planning
  • Retirement planning
  • Estate planning
  • Debt management
  • Insurance coverage
  • Budget planning

You might need all of these, or you might only need a few. In any case, ask the advisor about the services they offer.

Work with an experienced Wealth Advisor

At Sax Wealth Advisors, we approach wealth advising holistically. That means we look at all of your needs, factors, and liabilities and make “whole picture” suggestions you can use to reach your goals. That might be the style of advising you need, or it might not. To determine whether we’re the right fit for you, contact Sax Wealth Advisors today to schedule your consultation with a member of our firm.

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