Questions to ask your wealth manager

You have worked hard to set aside a part of your earnings to be invested to create a rich financial portfolio for you. The least you can demand is ‘trust’ from the person or organization you assign to manage your wealth.

Remember that a true wealth manager uses the financial planning process to help you figure out how to meet your life goals through the proper management of your financial resources.

Here is a checklist of eight questions you need to ask your financial manager before you hand over the cheque.

And remember to keep asking these questions as you go along.

What is your experience and qualification?

Wealth manager requires hands-on experience and a strong technical understanding of topics such as personal tax planning, insurance, investments, retirement planning and estate planning. He should also have in depth knowledge of how a recommendation in one area can affect the other.

Ask the planner about

• his qualification;
• the training he has successfully completed;
• the steps he takes to keep up with the changes and developments in the financial planning field;
• whether he holds any professional credentials including the internationally recognized Certified Financial Planner certification;
• how long he has been in practice;
• the number of and types of companies with which he has been associated.

What value added service do you provide?

Diversification is the essence of wealth management and, ideally, your financial manager should offer complete financial planning. He should be able to give advice on equity investment, debt, commodities, art, insurance, international investment, tax planning, estate planning, and cash flow analysis.

What plan can you suggest that suits my needs?

Each person’s financial plan is significantly different from that of other. It is therefore important that the plan made for you is unique to your income, your financial goals and your station in life.

Your financial manager should be able to consult with you, draw out your financial dreams, and make a plan that will help them come to fruition.

How much do you charge and on what basis?

It is better to be clear on this. Ask if the fee structure is available in writing. They can charge you in different ways:

* Fees: Based on an hourly rate, a flat rate or a percentage of the assets managed.

* Commissions: Charged on the quantity of products sold. Usually like the entry and exit load charged by the mutual funds.

* Combination of fees and commissions: You are charged fees for the amount of work done to develop the financial plan and commission on the products sold and bought.

What is your investment philosophy?

Don’t put all your eggs in one basket. Spread them around so that a downturn in the life of one asset does not affect the overall returns of your portfolio.

Your wealth manager should be able to put it down on paper and actually tell you how to do it.

How can I be assured of good services?

Look for an adviser who has a good support staff and a manageable client roster. Ask him how often will he sit down with you to review your financial plan and investments? How will he communicate with you?
A regular review depending on the complexity of your portfolio is important.

Do you recommend your own products?

If your wealth manager recommends products from his own group of companies. He may be a product pusher, not a planner. check out for his inherent interest.

The wealth manager should be able to impartially say which product is best suited for you from among the range and why.

If I am not satisfied, what’s the exit route?

The planner is a pure wealth adviser or broker- so you are never invested in him; you invest through him or on his advice. Your talking and understanding with him can alone guarantee a safe and hassle free environment, failing which one can exit.