General Questions to Ask Wealth Advisors

When interviewing a wealth advisor, it is important to ask the right questions and know how to interpret the answers.  Here are select questions to get you started.  In a formal selection process the family should come up with additional relevant questions that will isolate important criteria.

 A PDF of this list is available at no cost to registered users.

Firm Background and Ownership

  1. When was the firm founded?
  2. When did the firm begin providing wealth advisory services? What was the impetus behind the creation of the multi-family office business, if applicable?
  3. What is the firm’s organizational structure? If family-owned, what is the percentage of the family s interest?
  4. What is the firm’s ownership structure? If family-owned, what is the percentage of the family’s interest?
  5. Does the firm develop an annual strategic plan? If so, what are primary initiatives for the firm in the next two years?
  6. What is the firm’s stated mission?
  7. Is the firm a Registered Investment Advisor under the 1940 Act of the Securities and Exchange Commission? Please provide a copy of the firm’s ADV Parts I & II filed annually with the SEC.

 

Services

  1. Describe your expertise in each of the following service areas:
    • wealth transfer planning
    •  financial planning
    • foundation and philanthropic planning
    • investment planning
    • investment management
    • performance analysis
    • tax planning and tax compliance
    • bill paying and cashflow management
    • client education process
  2. What are your areas of greatest strength when providing wealth advisory services?
  3. What new services/service enhancements are you planning to introduce in the next year?
  4. What aspects of your business distinguish you from your competition?
  5. Do you work with outside investment consultants to enhance your research?

 

Client Relationships

  1. How many family relationships does your weath advisory business have? What is the distribution of clients by type (business owners, wealth owners, wealth inheritors, foundation, etc.)?
  2. How many new clients have you added/lost in each of the past three years?
  3. What percentage of your clients are full-service relationships? What services do you typically provide to the clients that don’t use your firm for all services?
  4. How do you get new business? Do you have an active new business development effort?
  5. What are current assets under management?
  6. Please provide a breakdown of:
    • growth in new assets due to new client business over the past three years 
    • growth in assets due to new assets from existing clients
    •  loss of assets due to client attrition in the past three years
  7. Provide references from three clients that have worked with your firm for at least three years?
  8. What were the reasons why former clients terminated your services in the past three years?

 

Employees

  1. How many employees do you have in each major department? Provide a breakdown of employees in the following categories:
    • senior relationship managers
    • investment professionals
    • tax and accounting professionals
    • philanthropy specialists
    • information technology professionals
    • marketing professionals
    • operational/back-office personnel
    • administrative staff
  2. How is the typical relationship management team structured? And how is technical expertise provided to support the relationship team?
  3. How are the relationship managers compensated? If they are paid incentive compensation, what is that basedupon? Do they share in firm profits?
  4. What is the typical account load for a relationship manager?
  5. Please provide the biographies for senior management and key personnel who would service my account.
  6. Provide the number of employee hires and terminations/resignations for the past three years.

 

Client Servicing and Reporting

  1. How do you most frequently communicate with clients?
  2. Do you have regularly scheduled client meetings? If so, what is the frequency and who typically represents the firm?
  3. How do you interact with the clients’ other key advisors?
  4. Do you provide electronic versions of client reports? Do clients have on-line access to their reports?
  5. What is the website address?

 

Client Education and Research

  1. What kind of client education do you provide?
  2. Do you offer formal seminars or other educational opportunities?
  3. Do you publish research or newsletters for your clients benefit? Please include a list of research papers distributed to clients with the date of publication.

 

Pricing and Fees

  1. Do you have a published fee schedule? If so, please provide. If not, please describe how you determine a fee for a new client.
  2. Is there a minimum account size or minimum fee requirement?
  3. How does the fee structure differ for different client types?
  4. Do you offer any performance-based fees? As an alternative to basis points?
  5. Do you accept soft dollars from any product providers?
  6. Do you accept fees of any other type of service providers? If so, under what circumstances?