WHAT IS WEALTH MANAGEMENT?

Wealth management, first and foremost, is a consultative process. It’s a combination of private banking services and strategies to help you meet your needs and financial goals, be it strictly personal or for the business you run as well. The primary goals of wealth management are to: 1) increase your wealth, and 2) safeguard it for the future. Now, more than ever, you have to understand and define your own financial goals. Wealth management services mean you don’t have to do it on your own.

WHAT IS A WEALTH MANAGER?

A wealth manager is your guide to all things that involve money. For someone to become a Certified Financial Planner (CFP), they need to pass a national test covering insurance, investments, taxation, employee benefits, retirement and estate planning — as well as meet experience requirements and abide by a code of ethics. As such, they’re the people who can help you make important financial decisions.

BEYOND MANAGING INVESTMENTS

The basic definition of managing investments is selecting the right balance of stocks, bonds, exchange-traded funds, mutual funds and other investment products that are suitable for your financial goals and retirement time horizons. The work that wealth managers conduct on your behalf, on the other hand, is not as easily defined. In fact, this basic definition is where a wealth manager’s job starts.

The services provided with a wealth management package will certainly include management of your investment portfolio, but that’s not all. Wealth managers also coordinate their clients’ dealings with other professionals such as insurance professionals, brokers, accountants and attorneys. Attorneys, aside from offering advice on tax laws, help to structure family corporations and trusts, and make the components of estate planning more complete.

PART ONE: WEALTH MANAGEMENT & THE ROLE OF A WEALTH MANAGER

Wealth managers are actively involved in their client’s retirement planning, too. This involves, among other things, updating and changing your investment profile based on where you are in your life cycle. Clients close to or in retirement, for example, are moved into more conservative investments. In addition, advisors will help with trust planning, insurance requirements and managing clients’ risks. Retirement planning includes protecting and producing income from investments during retirement.

Business planning is also a service that a wealth management consultant may offer to clients. Small businesses and enterprises alike need to be preserved, especially if the business is to be passed on to future generations. A wealth manager can help families grow their businesses, and put a succession plan in place so that the growth continues beyond the present owners. On the other hand, for those who want to acquire or sell businesses, wealth managers can provide the advice as well as find the buyers and sellers needed.

To be sure, a wealth manager goes beyond managing your investments to provide the best financial advice for you as a client. The relationship may need to last and become stronger, even over the long-term, so finding the right manager for you is essential. Learn how to find the right fit in the next part of this guide.

PART ONE: WEALTH MANAGEMENT & THE ROLE OF A WEALTH MANAGER

Finding the right wealth manager starts with research. Asking family, friends and business associates for recommendations is a great place to start. A firm with a good reputation that has “roots” in the community is always worth looking into first. Search the websites of the National Association of Personal Financial Advisors (NAPFA), Financial Planning Association (FPA) and the Certified Financial Planner (CFP) Board of Standards for members in your area.

Look up prospects online to get a sense of what each firm is like. Something as simple as the photos on their websites can form an impression of what they’d be like to work with or what demographic they’re targeting.

Finally, set up your initial meeting. Most planners do not charge for this, and it’s an opportunity to learn about their services and determine the possibility of your working together.

SERVICES

Be aware of red flags when evaluating wealth managers. Guarantees and promises such as to double your money or anything of this sort is a neon sign that you are not dealing with a reputable wealth manager. Instead, look for a company that can offer you:

PART TWO: WEALTH MANAGER: FIND THE RIGHT FINANCIAL FIT

Review the services provided and go with someone who suits your needs.

FEES

Do they charge a percentage for assets under management, or do they make commission from selling you a specific product? Simply put, some wealth managers make a commission on the financial products they sell you — insurance policies, mutual funds, etc — and charge a set amount, which may either be an hourly fee, a flat fee for a comprehensive plan, or an annual retainer. Neither is necessarily better than the other, but you should know how your wealth manager is being compensated. Also, although the initial meeting is usually free, it’s always better to ask to confirm.

a comprehensive assessment of your current financial situationthrough the review of documents, such as your last two tax returns, wills, insurance policies and estate and retirement planning documents, liquid and illiquid assets, and all income sources;

a clear perspective and identification of your financial needs and goals;

the development of a financial plan;

the pros and cons of various options and financial instruments (stocks, bonds, mutual funds, IRAs, etc.);

coordination with other professionals (investment brokers, lawyers, accountants) to execute your plan; and

a periodical review of your progress to make sure your financial plan and goals have not changed due to life events.

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PART TWO: WEALTH MANAGER: FIND THE RIGHT FINANCIAL FIT

In the first chapter, we discussed what wealth management is and the roles wealth managers play in your financial life. How do you find the right one? We answered that question in the second part, but there’s more to learn. In the third and final chapter are some questions you should ask your wealth manager.

Who is your ideal client? How many new clients do you take on each year?

Know their client specialization. You can use their ideal client profile to see if it’s a mutual fit before you start working together. Plus, by limiting the number of new clients accepted each year, this gives your wealth manager the ability to provide personalized service for each of his clients.

What is your investment approach?

What is the wealth manager’s strategy? How would he handle a financial crisis? If you have a strong preference for a particular philosophy, ask your wealth manager what his or hers is. Disciplined investment strategies are the foundation of a solid management process. The actions he takes should be consistent with your risk tolerance and goals but should suit how you want your money to grow as well. For instance, if you prefer to use low-cost funds, you can ask whether he plans to use actively managed funds or passive investments.

PART THREE: QUESTIONS YOU SHOULD ASK YOUR WEALTH MANAGER

Will I be working only with you or with a team?

This question will also help you see how often you’ll be in touch with your advisor. A wealth manager that is part of a team could meet with you only once a year but still have a colleague or their right-hand person reach out to you and keep you up-to-date. It’s particularly helpful to know who you can contact even if your wealth manager is away or on vacation. Some companies have a team approach rather than an individual approach.

In case of an emergency, how fast can I get access to my money?

Does your financial plan permit immediate withdrawals? Can you get it in time to pay, say, your child’s college tuition, in six months? Many advisers keep money in mutual funds, which allow for immediate withdrawals. But some clients hold hedge funds or other investments, which means you can only get periodic withdrawals. You should be properly informed to avoid having to wait for your funds when you’re cash-strapped and need immediate funds.

A wealth manager can be a great resource for you, your family and your business as you try and navigate the numerous financial decisions we all face every day. Start the process by talking to a wealth manager to learn more and how you can benefit from the advice and guidance of an experienced financial advisor.

PART THREE: QUESTIONS YOU SHOULD ASK YOUR WEALTH MANAGER

AOG Wealth Management

10130-E Colvin Run RoadGreat Falls, Virginia 22066

703-757-8020

AOGWealth.com

Securities offered through Kalos Capital, Inc. located at 11525 Park Woods Circle, Alpharetta, Georgia 30005 and/or TD Ameritrade Institutional Services located at 5010 Wateridge Vista Dr., San Diego, California 92121-5775. Investment advisory services offered through AOG Wealth Management, Inc. AOG Wealth Management, Inc. is neither an affiliate nor subsidiary of either Kalos Capital, Inc. or TD Ameritrade Institutional Services.