Is Wealth Management What You Think It Is?

February 17, 2015
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Wealth Management can be defined by Forbes as: “The science of solving/enhancing his or her financial situation. Wealth management is the ability of an advisor or advisory team to deliver a full range of financial services and products to a client in a consultative way.” The world of financial services has traditionally been built around products and services offered by a variety of brokers, advisors and insurance specialists. The differences between a stockbroker at a wall street firm and an independent registered investment advisor is often discussed, but not always understood. An independent registered investment advisor (RIA) imposes a strong “fiduciary standard” on an advisor whereas the stockbroker model typically holds brokers to a less strict and less specific “suitability standard,” in which recommended investments must be merely suitable for a client.

“The fundamental difference between a fiduciary and a stockbroker is the basis of how he or she is compensated,” said Chris Rasberry, COO of HFG Wealth Management. “Typically a stockbroker, sometimes also referred to as ‘advisor’, is paid on the commissions sold to clients directly or within a ‘program’ of investments. On the other hand, a fiduciary wealth manager is usually paid a fee which allows him or her to spend time understanding what’s important to you and your family. Often this includes taking the relationship further by creating a comprehensive financial plan tailored to reach each of your various financial goals and objectives,” Rasberry said.

A “financial fiduciary” is held to a higher standard and is required, by definition, to place the needs of the client ahead of their or their firm’s own interest. Much like you would expect from a physician, attorney or certified public accountant, a registered investment advisor is bound by their governing entity to place the needs of their clients first.

I feel wealth management can be described as comprehensive method of financial planning known as Financial Life Planning™. I have seen this as a financially effective and personally rewarding approach to creating a practical, lasting financial plan designed to embrace true wealth management. It is important to accurately understand your most profound life goals, purpose and how you want to live to give your life the most meaning and purpose in accordance with your financial goals. The next step I can suggest in defining what wealth management is for you and building a financial plan around this framework. A true fiduciary will create a wealth management plan that creates a long-term vision consistent with your core values by constructing a comprehensive financial plan that is tailored to reach each of your various financial goals and objectives.

As a reminder, I make myself available to serve as a sounding board for your family, friends and associates to comment on their situation, answer any questions they may have, and help them better recognize the advantages of working with a fiduciary advisor. As we have seen, the ongoing complexity and volatility in the financial markets has caused many investors to question what to do next. If someone close to you could benefit from our second opinion service to help make a more informed financial decision, please don’t hesitate to have them contact me. As a courtesy, we can look at any gaps that may need to be identified and let them know candidly their overall financial picture. We are here to offer assistance and strategies for financial and life goals at every stage.

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Copyright © 2017. HFG Wealth Management, LLC. Investment advisory services offered through HFG Wealth Management, LLC – An independent Registered Investment Advisory firm registered with the SEC. Investing involves risk including the potential loss of principal. No investment strategy can guarantee a profit or protect against loss in periods of declining values. Therefore, any information presented here should only be relied upon when coordinated with individual professional advice. [ more disclosures ]