How do you choose a wealth manager?

Your financial wellbeing impacts every part of your life, so who should you trust with managing your investments? A wealth manager can be pivotal in securing the future you desire—and is not just for very rich—but it’s vital to ask key questions before you choose one.

‘You have to find the right firm for you, as this could be the beginning of a long-term relationship,’ says Paul Willans of AJB Wealth in Hampshire. ‘It’s important that you feel comfortable talking to them, and that they understand your objectives and concerns.’

Some people will be investing for the first time, perhaps having received a capital sum. Others might have a financial adviser but wish to have their investments more actively managed. Whatever your situation, here are seven points to consider when choosing a wealth manager:

1. How do they serve clients?

How regular are meetings? Can you pick up the phone and speak to your adviser? Or are call centres the order of the day? AJB Wealth values personal relationships, but also provides 24/7 access to investment updates and secure messaging on the firm’s client portal. We also appreciate that some people prefer face-to-face meetings, while others like the convenience of virtual meetings on Microsoft Teams or Zoom.

2. Are they independent?

Some firms are free to select investments and other products from the whole market. Others are restricted to a limited range provided in-house or by partners. AJB Wealth is independent, and so puts clients first when making investment decisions.

3. Check credentials

Check out both the firm and individuals on the FCA register. Anyone managing investments needs a level 6 qualification at least, but chartered status is the gold standard. Paul Willans, for example, is a Chartered Fellow (financial planning) and Chartered Wealth Manager of the Chartered Institute for Securities and Investment (CISI).  He is also a full member of STEP, the Society for Trust and Estate Professionals.

In addition, ask how long they’ve been advising clients, as experience is as important as qualifications.

4. Consider their approach to investments

Unless you have a good understanding of investment, it can be hard to accurately assess a firm’s past performance. Wealth managers will measure their portfolios’ performances in relation to relative benchmarks, such stock market indices or inflation.

However, returns alone don’t tell the whole story, and will be influenced by factors such breadth of diversification and risk. For example, a speculative, or more focused, investment strategy may lead to greater returns, but may be more volatile in the short term. A wealth manager should assess your personal objectives and appetite for risk, and create an appropriate strategy. AJB Wealth strives hard to minimise risk while still delivering high levels of return.

If capital protection is important to you, ask how they performed during the COVID epidemic, or after the Russian invasion of Ukraine. It’s important to see data for longer periods, such as the last three years. Also, remember that a good track record is no guarantee of future performance.

5. What about fees?

When it comes to personal service and active management, cheapest is rarely the best. Consider both the subjective and objective value of the advice being given, and ask about the costs of the underlying investments.

‘At AJB Wealth, we offer highly-qualified, professional advice and a bespoke package, so you only pay for the services you need,’ says Paul. ‘And all charges are agreed upfront, so you never receive an unexpected bill.’

What’s more, AJB wealth incorporates exchange-listed funds (ETFs) within its portfolios—please see our blog What are ETFs and why do we use them?

These have much lower charges than traditional collective funds, as they have no initial charges (apart from a small stockbroking charges) and very low annual charges. Some index trackers are as low as 0.07% pa, compared to up to 1.5% pa for some collective funds.

6. Is it a holistic service?

Wealth management should take full account of your circumstances and goals when formulating a strategy. It’s important to take into account legal and tax considerations as part of this. A good wealth manager will be happy to take time getting the full picture, and will only make specific recommendations when fully armed with the facts.

7. Do you understand each other?

Your wealth manager could become your trusted adviser for many years to come, so it’s important to feel comfortable. Is the firm invested in you, with your long-term interests at heart? A local independent such as AJB Wealth can often offer a more personal service.

If you are looking for a wealth manager, it may be helpful to read our blog on the difference between discretionary and advisory wealth management.

At AJB Wealth, our experienced and highly-qualified team is well placed to work with you, and your other professional advisers, to help you achieve financial efficiency and security. To arrange an initial consultation, please book a meeting, or call us on 01483 774 070.