True Wealth Management: Your Next Steps

November 16, 2013
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This post wraps up our blog series “Intelligent Investing: Five Key Concepts for Financial Success.” Today, we look at the attributes of a true wealth manager. We’ll also discuss in detail the consultative approach that’s at the heart of a wealth management approach.   

As we discussed at the beginning of this guide, taking a comprehensive approach to achieving all your financial dreams requires wealth management. This means more than just taking care of your investments. It also means addressing your advanced planning needs, including wealth enhancement, wealth transfer, wealth protection and charitable giving.

Such a wide range of financial needs requires a wide range of financial expertise. Because no one person can be an expert in all these subjects, the best wealth managers work with networks of experts—financial professionals with deep experience and knowledge in specific areas.

Effective wealth managers, then, are experts at relationship management—first building relationships with their clients in order to fully understand their unique needs and challenges and then coordinating the efforts of their professional networks in order to meet those needs and challenges. Wealth managers must also work with their clients’ other advisors— such as attorneys and accountants—in order to ensure optimal outcomes.

Many in the financial services industry today call themselves wealth managers but offer little more than investment management. How then will you know whether you are dealing with a true wealth manager?

First, the financial advisor should offer a full range of financial services, including the four areas of advanced planning that we mentioned above. As we’ve said, the wealth manager should be backed up by a network of professionals to provide these services.

Second, the wealth manager should work with you on a consultative basis. This allows the wealth manager to uncover your true financial needs and goals, to craft a long-range wealth management plan that will meet those needs and goals, and to build an ongoing relationship with you that ensures that your needs continue to be met as they change over time.

This consultative process usually unfolds over a series of meetings:

  • At the discovery meeting, the wealth manager determines your current financial situation, where you want to go and the obstacles you face in achieving what is important to you.
  • At the investment plan meeting, the wealth manager, using the information he or she gathered at your first meeting, presents a complete diagnostic of your current financial situation and a plan for achieving your investment-related goals.
  • At the mutual commitment meeting, assuming that the wealth manager can truly add value, both you and the wealth manager decide to work together. You now officially become a client.
  • At the initial follow-up meeting, the wealth manager helps you to organize your new account paperwork and answers any questions that may have arisen.
  • At regular progress meetings, which are typically held quarterly, the wealth manager reports to you on the progress you’re making toward achieving your goals and checks in with you on any important changes in your life that might call for an adjustment to your investment plan. In addition, at the first regular progress meeting, the wealth manager presents to you a wealth management plan— a comprehensive blueprint for addressing your advanced planning needs that has been developed in coordination with the wealth manager’s network of professionals. At subsequent progress meetings, you and the wealth manager decide how to proceed on specific elements of the wealth management plan. In this way, over time, every aspect of your complete financial picture is effectively managed.

consultative-wealth-management-process
Exhibit 6 shows an overview of the consultative wealth management process. In addition, you should always expect outstanding service from any financial advisor you choose. Your phone calls should be returned on the same day, you should receive quick and complete responses to all your questions, you should be able to meet with your financial advisor as often as you wish, and your financial advisor should always take your unique needs and preferences into account. In short, you should expect to be treated like who you are—a very important client.

If you are currently working with a financial advisor and are unsure whether he or she is using the consultative wealth management approach we’ve discussed here, we recommend that you have another financial advisor complete a diagnostic of your situation so that you have a second opinion.

You owe it to your family and yourself to make sure that your investment plan—and overall wealth management plan—is designed to effectively address your very specific financial needs in order to maximize the probability that you will achieve all your financial goals.

We wish you nothing but success in achieving all that’s important to you.

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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 ]