Whether your portfolio is already managed by a professional, or you are seeking advice for the first time, finding a new wealth manager can be a challenge. You are unlikely to have the time and energy to do extensive research. Hence your decision is likely to be guided by conversations with friends and family, broad searches on the internet, and gut feel. You may draw confidence from the protections built into the financial services industry, but you still need to find a manager you can trust.

Perhaps an even greater challenge, as with any significant relationship, is to find a firm that understands your needs. Selecting a wealth manager is likely to be one of the most important financial decisions you make. You should consider what is most important to you. This may be the investment approach, service levels, or simply whether the company is located near to you.

Successful wealth management should be a long-term project. It should last decades rather than years, with the potential to hand over to future generations. Hence it is essential to find the right relationship at the start.

Once you connect with a wealth manager, you are then likely to arrange a call or meeting. At this stage, you should be prepared to assess whether the firm has the expertise and capabilities to suit your requirements. Equally as important is whether the firm’s style and key individuals fit your character.  It is wise to prepare a list of questions, and an experienced manager should be more than happy to answer all your questions in full.

Questions to consider prior to your search

1. Would you prefer a large institution or a smaller boutique?

Boutique firms often specialise in creating bespoke investment portfolios.  Each business will have a particular investment style.  You may have specific demands, and a boutique wealth manager is likely to be more flexible and focused on your needs than a large firm.  In addition to a more personal service, other likely advantages include independence and low staff turnover.  You may be able to deal directly with senior management.

The success of the firm is dependent on the quality of advice given and service provided, so the business is likely to work harder to ensure you are given the service you require.  In terms of drawbacks, some boutiques don’t offer the same range of services that an institution can provide, such as credit cards, and may not have an international presence.

Private banks typically offer traditional banking with enhanced customer service.  Alongside wealth management, many businesses provide additional capabilities such as mortgages and other lending.  The bank might have international expertise and capabilities for clients with complex financial affairs. However, the range of expertise may differ significantly between banks, and fees are often outdated, and generally higher than in smaller firms.  The bank may not be flexible in finding solutions or helping with specific issues, and may promote certain solutions which benefit the bank but may not be optimal for clients. Staff often move around so a client’s point of contact may change frequently.

2. Would you prefer a discretionary or advisory service?

For a discretionary service, the firm manages a client’s portfolio according to an agreed risk profile. The company will manage the portfolio on an ongoing basis without deferring to you before making adjustments. The manager will still refer back to you if they wish to take action which is outside the scope of the original mandate.

For an advisory service, the firm makes recommendations based on your circumstances and appetite for risk, but you must be consulted and agree before any changes are made to the portfolio.

For each service, the firm must ensure that the portfolio is suitable for your objectives and risk appetite. Ultimately the decision should be about personal preference and the level of involvement that suits you.

An advisory service promotes client engagement and a highly interactive level of service. There is arguably lower risk for both the client and manager, as each adjustment to a portfolio is done with your prior approval. The manager is required to contact you in order to approve any changes, which may cause delays if you are not contactable.

A discretionary service enables the manager to take advantage of market opportunities or adjust risk in the portfolio according to market conditions. You are released from day to day involvement, and the manager can implement changes to portfolios as necessary to ensure they are managed effectively. Revisiting your investment strategy regularly is a core part of this service.

Either way, the firm should adopt a pro-active approach to portfolio management in accordance with your objectives. In addition, the company should undertake regular reviews with you to discuss your financial objectives.

3. How would you describe your current financial situation, appetite for risk, and objectives for the future?

It is important to ensure that the manager has a good understanding of your current financial circumstances and your future objectives and ambitions. Be prepared to provide extensive personal information to the firm.  It may feel intrusive, but the company is obliged to go through the ‘Know Your Client’ (KYC) process with you and will not be in a position to fulfil your needs without sufficient information.

It is a good idea to ask for a copy of the ‘fact find’ and completing it in advance of a meeting.  This will be worthwhile for both you and the manager and make more efficient use of time at your first meeting.  A competent wealth manager will be skilled at assessing a client’s true attitude toward elements like risk and market volatility.  It is a regulatory requirement that managers design investment strategies that are aligned with your profile and requirements, both at the start and evolving as your needs change over the years.

4. How often would you like to have contact with your manager?

Even if you opt for an advisory service, you are unlikely to want to talk to your manager every day.  However, you might want to be in touch fairly regularly, at least early on in the relationship.  It is worth asking how often the firm generally meets with clients and how they prefer to communicate so that expectations are not missed. Everyone is different, some people need regular contact, others want as little as possible.

What to expect from a Wealth Manager?

A Wealth Manager will meet with you and chat about your financial goals, any savings you have, your pensions, your income and outgoings. They will then put together recommendations based on your circumstances to see how they can get your money working harder.

The best advice starts with a conversation

Our team of Wealth Managers are highly qualified with experience in financial planning to work with you to create a financial plan that’s right for you and evolves with you – answering your questions, providing advice and updating your financial plan along the way to help you achieve your life goals and ambitions. You’ll also have access to additional resources and advice as our Wealth Managers work with a range of specialists in multiple sectors, such as solicitors, business advisers and accountants.

PLEASE NOTE: Grosvenor Wealth Management Ltd is authorised and regulated by the Financial Conduct Authority. The value of investment can go down as well as up and you may not get back the original amount you invested. Tax treatment is dependent on individual circumstances and may be subject to change. Tax planning is not regulated by the Financial Conduct Authority.