General Questions to Ask Wealth Advisors
When interviewing a wealth advisor, it is important to ask the right questions and know how to interpret the answers. Here are select questions to get you started. In a formal selection process the family should come up with additional relevant questions that will isolate important criteria.
Firm Background and Ownership
- When was the firm founded?
- When did the firm begin providing wealth advisory services? What was the impetus behind the creation of the multi-family office business, if applicable?
- What is the firm’s organizational structure? If family-owned, what is the percentage of the family s interest?
- What is the firm’s ownership structure? If family-owned, what is the percentage of the family’s interest?
- Does the firm develop an annual strategic plan? If so, what are primary initiatives for the firm in the next two years?
- What is the firm’s stated mission?
- Is the firm a Registered under the 1940 Act of the Securities and Exchange Commission? Please provide a copy of the firm’s ADV Parts I & II filed annually with the SEC.
- Describe your expertise in each of the following service areas:
- wealth transfer planning
- financial planning
- foundation and philanthropic planning
- investment management
- performance analysis
- tax planning and tax compliance
- bill paying and cashflow management
- client education process
- What are your areas of greatest strength when providing wealth advisory services?
- What new services/service enhancements are you planning to introduce in the next year?
- What aspects of your business distinguish you from your competition?
- Do you work with outside investment consultants to enhance your research?
- How many family relationships does your weath advisory business have? What is the distribution of clients by type (business owners, wealth owners, wealth inheritors, foundation, etc.)?
- How many new clients have you added/lost in each of the past three years?
- What percentage of your clients are full-service relationships? What services do you typically provide to the clients that don’t use your firm for all services?
- How do you get new business? Do you have an active new business development effort?
- What are current assets under management?
- Please provide a breakdown of:
- growth in new assets due to new client business over the past three years
- growth in assets due to new assets from existing clients
- loss of assets due to client attrition in the past three years
- Provide references from three clients that have worked with your firm for at least three years?
- What were the reasons why former clients terminated your services in the past three years?
- How many employees do you have in each major department? Provide a breakdown of employees in the following categories:
- senior relationship managers
- investment professionals
- tax and accounting professionals
- philanthropy specialists
- information technology professionals
- marketing professionals
- operational/back-office personnel
- administrative staff
- How is the typical relationship management team structured? And how is technical expertise provided to support the relationship team?
- How are the relationship managers compensated? If they are paid incentive compensation, what is that basedupon? Do they share in firm profits?
- What is the typical account load for a relationship manager?
- Please provide the biographies for senior management and key personnel who would service my account.
- Provide the number of employee hires and terminations/resignations for the past three years.
Client Servicing and Reporting
- How do you most frequently communicate with clients?
- Do you have regularly scheduled client meetings? If so, what is the frequency and who typically represents the firm?
- How do you interact with the clients’ other key advisors?
- Do you provide electronic versions of client reports? Do clients have on-line access to their reports?What is the cost?
Client Education and Research
- What kind of client education do you provide?
- Do you offer formal seminars or other educational opportunities?
- Do you publish research or newsletters for your clients benefit? Please include a list of research papers distributed to clients with the date of publication.
Pricing and Fees
- Do you have a published fee schedule? If so, please provide. If not, please describe how you determine a fee for a new client.
- Is there a minimum account size or minimum fee requirement?
- How does the fee structure differ for different client types?
- Do you offer any performance-based fees? As an alternative to basis points?
- Do you accept soft dollars from any product providers?
- Do you accept fees of any other type of service providers? If so, under what circumstances?