This may sound sacrilegious coming from the president of a company that provides wealth management services.
However, it may ring true for you, for any number or reasons:
- Everyone seems to be a wealth manager. The term “wealth manager” has been terribly overused, causing confusion about what it means and what it doesn’t–and who one is and who isn’t.
- Financial advice = Investment advice. Your experience working with financial advisors may have been primarily through a retail brokerage, which offers purely financial advice. It may be unclear what value is offered by the broadened portfolio of advice and service that wealth management provides.
- Too many cooks in the kitchen. You enjoy coordinating your various advisory relationships and investments. Why add another?
- Lack of Need: There is a perceived–or real–lack of need for wealth advisory services at this time of your life.
Recently, I was having a discussion with a wealth creator who was struggling with these issues. He was frustrated with the brokerage model of advice but he was having a hard time determining whether he needed a wealth management-style solution.
Here’s what he wanted:
- an “a la carte” advisory solution, one where he could choose the services he wanted and opt out of others
- an investment-only orientation and the freedom to handle other financial advisory services himself
- the benefits of wealth management–e.g. objectivity, customized solutions, integrated advice and reduced conflicts of interest, etc.–but without the relationship
- to receive custom services but pay based on a discount brokerage fee structure.
Those are not uncommon preferences for wealth creators, especially those new to wealth. If this sounds familiar to you, I am going to let you off the hook:
Just because you’re a wealth creator doesn’t mean you need a wealth manager.
Locking into a relationship with a wealth manager isn’t always the right solution. And it could come at the wrong time. Like a personal relationship, it’s better to stay single if you feel the relationship or timing isn’t right. Better to do that than get married and have it end in divorce several years later.
The same is true for wealth management: If you don’t seek a more substantial relationship, you shouldn’t get into one. Trying to covert an a la carte advisory relationship into something it wasn’t designed for can be a dead-end proposition. It can end up in “divorce.”
One thing I haven’t mentioned yet is this: You undoubtedly receive regular messages from the financial services industry telling why you need their help and their model. They send these messages out broadly, without accounting for whether their model is really right for you. Financial services firms make their case constantly, without knowing anything about yours.
So some people believe they don’t need a wealth manager because they’re not familiar with the value. Others truly don’t need, or aren’t well matched, with the wealth management model.
But my point is this: Just because you have wealth doesn’t mean you need a wealth manager.
No matter who you are and what your situation is, it’s important that you get clear on your needs first before entering into an advisory relationship with anybody. And that includes a wealth manager.