In my previous piece, I outlined the differences between investment managers and financial planners. I shared that we, at First Foundation Advisors, take the hybrid approach of investing and planning and that we call it “private wealth management.” This approach seems to work well for our clients, especially those who want a personalized investment solution that speaks to both financial returns as well as life goals.

In this article, I am sharing with you questions that you can ask to help uncover which approach, and therefore which firm, is the best fit to manage your wealth.

Questions you can ask to help identify your trusted advisor

To make it easier for you to take action on creating your wealth plan, we thought it would be valuable to provide several questions that you can ask of any financial advice-giving professional to see if they qualify for what you are looking for in a trusted advisor.

What is the firm’s primary focus?

In other words, can the firm help you with all your unique needs? No one client is the same. The Starbucks approach might work for coffee but we do not think it is appropriate for finances. People want customization and personalization. Many firms take a one size fits all (grande latte, please) approach to planning, while others will focus on only individual planning, business planning, estate planning, multi-generational planning, or philanthropic planning. Rarely do they have the ability to serve all of these categories, even though it is highly likely that throughout the course of your life you will need someone who can handle all of these needs. So then why not find someone who can grow with you as your needs evolve? Take the time to do the pre-work upfront and you will likely end up with an advisor who can help you during any stage of life.

What are the credentials and how do they apply to wealth planning?

Financial planners may have extensive experience working on plans for all sorts of circumstances. Many have experience practicing tax law, which can come in handy if you have a complicated estate or complex business needs such as succession planning or M&A. Team members should be accredited with a CFP or CFA, and have committed their careers to viewing investment management through the lens of financial planning. These credentials ensure, among other things, that they stay current with the latest tax laws as well as take the course of action that is in your best interest. But these credentials have become table stakes for any advisor. Be sure yours have them.

How is your planning team compensated?

There are essentially three ways a wealth planner is compensated. They are either 1) paid a commission for the sale of a plan or other financial instrument; 2) paid a percentage fee on assets they advise on; or 3) receive a flat fee for completing your plan. Determine up front which way you are most comfortable with.

How do they measure success?

Benchmarking returns for investment managers can be relatively straightforward. Determining how your financial plan is doing relative to your goals can be quite obscure. Ask how they measure success. And ask yourself what you would deem a successful financial plan. Some of you might have wild ambitions and are okay only hitting 80% of your targeted goals, while others might want to see every financial dream come true. No one person is the same, so before you embark on a plan, take stock of what will be your metric of success.

Who is your main point of contact?

Are you speaking with the credentialed team member, or do you have to work through other people in order to get on his or her schedule? Obviously, who you work with is important. You must feel a sense of trust. Are you speaking with a call center who relies on a technology to supply the answers you need? Be sure you are comfortable with the person you interact with. There is no right answer to this, it is a personal preference that should be addressed. Also, it is important to note that wealth planners typically take a consultative approach, so if you aren’t getting the feeling that you are being coached and mentored along the way, then move on. After all, this is your money – you (or someone close to you) worked hard for it. You should feel the sense that the person helping you is equally committed to working hard for you.

What happens next?

Always try to stay one step ahead. A good wealth planner will outline the steps in a very logical flow. Every financial planner has their five- or six-step process. This should allow you to see the next tangible goal. But also keep asking “what’s next” – as we have seen in recent markets, there is always room to improve your positioning based on your life goals. Evaluating every potential scenario (within reason) will help you prepare for the next move, whether it be in the markets or in your life.

We hope you found this to be informative. If you would like to learn more about how we approach developing your financial plan, please contact us. Or read more from our team here.