By Mark Barnicutt on June 28, 2019

When families have built wealth over years or decades, and in particular when that wealth was largely due to an event such as the sale of a business, their attention quickly turns to getting peace of mind knowing that their wealth is protected. This is why we find most clients’ definition of excellence in wealth management is tied to the concept of sustainability. In other words, don’t lose our money!

But how do you make sure you are working with the right advisory firm, one that is not only credible but can competently manage your assets in a tailored and prudent manner?

We believe assessing financial advisors comes down to two key factors:

Credibility:  Are you who you say you are and are you qualified to do it?

Competency:  Are you good at what you do and will you help us accomplish our financial goals?

To help you assess these two critical factors, we have develop a list of 21 Questions to ask your current or prospective advisor. The question are listed below and discussed in-depth on our interactive resource page.

Judging Credibility:

  1. Please describe the history, size, ownership, and management of your firm.
  2. Is your firm registered with a securities regulatory body?
  3. Who are the key investment professionals in your firm?
  4. What is your industry experience, financial education, and professional certification?
  5. Have you and/or your firm ever received any regulatory and/or professional sanctions?
  6. Please describe the investment professional and administrative support team who would be managing our wealth?

Although the answers to these questions help you decide whether or not you want to even consider engaging a given financial advisor, to determine if they’re actually good at what they do you need to assess a financial advisor’s professional competency.

Assessing Competency:

Investor Profiling Questions

  1. Please describe the process that you and your firm would use in determining client investment objectives?
  2. Please describe the process that you and your firm would use in determining client tolerance for varying degrees of investment risk?

Asset Management Questions

  1. Once a client’s investment objectives and risk tolerances are determined, please describe the process that your firm uses for creating client portfolios.
  2. What role do the various investment securities used in client portfolios perform in terms of risk and return?
  3. Do you use customized Investment Policy Statements for each client?
  4. What are the due diligence processes that you and your firm conduct on investment securities prior to inclusion in client portfolios as well as on an ongoing basis?
  5. Once a client portfolio has been implemented, what are you daily practices for ensuring that their portfolios adhere to the terms and conditions agreed upon in their Investment Policy Statement?
  6. Please describe your client portfolio review & reporting processes?
  7. What are your firm’s beliefs in the management of client wealth?

Stewardship Questions

  1. Please describe the structural and operational practices of the oversight body in your firm that ensures our wealth is being managed in a prudent manner and in accordance with my investment objectives, risk tolerances, and portfolio constraints.
  2. How does your firm manage the potential conflicts of interest that can exist amongst custody, investment accounting, and investment management?
  3. What are the monitoring practices for all investment professionals that will be involved in managing my wealth?
  4. How are all of the investment professionals who will be involved in managing my wealth compensated?
  5. What are the Codes of Conduct and/or Professional Standards that you and your firm adhere to?
  6. Please describe how all client fees are calculated and charged?

We encourage you to review the full 21 Questions Interactive Resource Guide and Download our Summary PDF.

HighView is an experienced fiduciary portfolio management firm committed to investor transparency.

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