In the 1990s, it was decided that more was needed in the management of people’s money. Yes, you could hire an accredited financial advisor, but the wealth management advisor was introduced to look at things over a longer period, identifying long-term goals and creating plans to reach them. Since then, the field of wealth management has grown to become a huge market.
Private Wealth Management
Wealth management is both offered by large firms and by smaller independent advisors. The independent accredited financial advisor will take a look at an individual’s current wealth and weigh up how much risk it is possible to take with that money. This is usually referred to as Private Wealth Management (PWM). Taking financial investment advice from a wealth management service is by far the safest option, with most people in the field having a continued education to sustain their expert status. A wealth management specialist must have relevant credentials to perform this level of investment advice.
Finding an accredited Wealth Management advisor
Finding a good financial planning advisor is not difficult. You can ask around to gain a reliable word of mouth recommendation. There are plenty of registered investment accredited advisors around but the cream of the crop will quickly become obvious if you do your research. Of course, you will need to pay for the privilege but it’s definitely worth it.
Commission-Based Financial Advice
In this circumstance, your adviser only receives payment when a financial product has been implemented. Therefore if there is much risk involved in a product, your adviser is highly unlikely to recommend you in that direction. Therefore it is more likely to be a win-win situation for both of you. Commissions tend to be the same across all financial products so advisers are unlikely to be swayed by a better offer.
Fee only Financial Advisers
This is a relatively new type of service – the hire of a fee only financial adviser means that you will only pay a flat rate on his or her services rather than handing over commissions on investments that they make for you. Hiring a fee only financial adviser is a great way of planning your budget precisely and foreseeing any future costs.
A great benefit of fee only professionals is that they are more likely to be totally objective. Normally, a financial adviser might receive some kind of benefits from bringing investors to certain markets whereas a fee only financial adviser doesn’t receive any such perks.
So depending on the level of activity you expect to be making with your investments, it might be a good route to take. However, if you’re planning infrequent activities, commission-based financial advice may be smarter for you in the long term. It may suit you better if all advice costs are absorbed by a transaction taking place. Also, if your transaction is relatively low, your commission may well be less than you would have paid in hourly fees. Conversely, if you’re likely to be making larger transactions, hourly fees that you have to pay will probably end up being considerably lower once the transaction has been completed.
