Wealth management advisors are professionals who advise their clients on decisions related to wealth management and personal finance. Depending on their area of expertise, wealth management advisors can help you with everything from putting together an entire retirement savings plan with a timeline or simply answering a question about whole life insurance.
Here’s a small snapshot of some of the things that a wealth management advisor can do:
- Meet with you to assess your current financial situation and future goals
- Develop a comprehensive plan that addresses your primary areas of financial concern: retirement, college planning, insurance, avoiding estate tax, etc.
- Provide advice as unexpected economic issues arise in your life
- Set up investment accounts and invest funds for you
- Locate appropriate financial vehicles for you, such as insurance policies or mortgages
Benefits of Hiring a Wealth Management Advisor
Wealth management advisors can be great when you are confused, emotional, or uninformed about various wealth management topics. Add that most people can’t see far enough into the future to imagine their retirement, much less plan for it, and professional advice can be convenient. A qualified advisor will ask you many questions—some of them uncomfortable—to get the complete picture of where you want to take your life.
Once all the details are in hand, the wealth management advisor can create a plan and offer advice on investments, retirement planning, estate planning, tax liability, and your kids’ college education. The breadth of the advisor’s knowledge can make many difficult decisions easier.
Some financial planners go further, actively helping you to buy insurance products and to invest in financial products, such as mutual funds or certificates of deposit (CDs). While not all wealth management advisors can trade securities, many can act as your liaison with a broker or money manager who does. They can also work with trust, the estate-planning lawyer, or an accountant on your behalf.
Paying Your Wealth Management Advisor
Getting quality advice isn’t free; a professional financial planner will cost you money. Some planners charge by the hour or have a set rate for certain services: Fee-based or fee-only planning. Some are compensated by a commission every time they make a transaction or sell you a product. Some get paid in both ways.
Fee-based advisors often claim their advice is superior because it carries no conflict of interest, as commission-based recommendations might. In response, commission-based advisors argue that their services are less expensive than fees that can run as high as $100 per hour or more—and that you’re paying for demonstrated services and activities, not just amorphous advice or untraceable work hours.
When deciding on the type and scope of advice that you might need from a financial advisor, it’s essential to ask the right questions about your money needs and assess your level of comfort in managing your finances.
Some consumers may balk at the idea of paying hundreds of dollars to plan, budget, and invest their money, but think of it as an investment: The money can buy you a quality plan that can be put together in a few hours and last you for years, with only a minimal need for a financial checkup with the planner from time to time.