Conflict of Interest Questions Applicable to All Service Providers
General
Do you view yourself as a financial advisor, fiduciary or a product provider?
Please disclose any potential conflicts of interest that might impact your delivery of investment consulting or wealth management services to families.
What professional firms do you receive referrals from? How much of your new business comes from these firms?
Compensation and Incentives
Is your performance measured by the advice you give or the products that you sell?
What business metrics are used by your manager to evaluate your performance?
Please describe how client advisors and senior managers are compensated for their work with clients.
What are the components in the compensation structure? And how are they applied?
How is the institution compensated? How is the individual compensated? Are you compensated differently for proprietary vs. non-proprietary products?
Please describe the circumstances, if any, in which your firm receives compensation that is not paid directly by the client but is related to the client services work for my account, including but not limited to:
Custodial and trading fees
Brokerage fees
Commissions
Asset management fees
Referral fees
12b-1 mutual fund fees
Soft dollar compensation
Fee Negotiations and Other Revenues
Please provide your firm’s standard fee schedule(s) for investment consulting and wealth management services provided to family relationships of all sizes.
If your firm negotiates fees or develops customized fee quotes for family relationships, please describe the average or typical differences between fees calculated under your standard fee schedule(s) and fees actually charged.
Does your firm negotiate fees? Are similarly situated clients charged similar fees?
Please provide client fee revenue figures for each of the past three calendar years and identify any other revenue generated from this client activity:
The private wealth management group
The private wealth investment consulting group
Other private wealth advisory service groups
The trust services group
Regulations
Can you explain what issues your firm has had with conflicts of interest and what steps were taken to remediate the issue?
What alternative is available to our family if these conflicts are not acceptable to us?
Is your firm regulated by the OCC, SEC, Federal Reserve, or any other federal or state governing agencies?