How to choose a wealth management firm

  • When investors talk to a wealth manager they often assume that he or she is an investment specialist. In many cases this is far from the truth. Very often the first person an investors talks too is a relationship manager or a sales person. The relationship manager objective is to bring in as many clients as possible and the compensation scheme reflects this objective. There is no incentive for a relationship manager to recommend you the best possible investment strategy, but just anything which looks right or "suitable" or generates more management fees.

  • Make sure that you know the structure of the fees. Often a wealth manager gets an incentive from a 3rd party to use a specific insurance instrument or choose a financial instrument.