What do wealth management companies do?

The services of wealth management companies varies considerably and it’s worth considering that the usage of term wealth management has expanded from its origins in large private banking and corporate finance organisations.

Many Independent Financial Advisors have changed their approach to incorporate wealth management.

With that in mind here you’ll find some guidance on the differences between a Wealth Manager and IFA and how you can go about finding the right fit for your financial needs.

Let’s start with Wealth Manager – traditionally these have been the large investment groups or arms of banks, generally attracting High Net Worth (HNW) and Ultra High Net Worth (UHNW) clients with multi -million pound investment portfolios.

Though increasingly Wealth Managers are to be found in smaller firms and will take clients with investments of £250,000+.

For those who want a package of services such as accountancy, tax and legal advice under a single roof the larger firms of wealth managers remain an option. If however, you want truly independent financial advice such firms will not necessarily be able to provide it. The reason being they are often tied to particular financial products or services as they are part of a corporate group or network of advisors.

Some wealth managers are allied to banks where the adviser can only advise on the financial products available from their own bank, regardless of whether they are the most appropriate for you.

Restricted advice via a wealth manager, bank or network of restricted advisors will, by definition, limit the range and scope of investment options. The Wealth Management label does not signify independence. Indeed in many cases they are restricted in the advice they are able to give.

Independent Financial Advisors give recommendations for pensions and other investments.

• They differ from Restricted Advisors in that they can give unbiased advice about the whole range of financial products from all the different companies available in the UK investment market.

• By contrast restricted advisers give advice on a more limited basis. They may specialise in one area, for example restricting themselves to protection or pensions. Or they may be restricted in terms of only offering advice on financial products from a limited number of companies.

• It is always best to check when you are seeking financial advice whether the advisor is restricted or independent. Looking for an independent financial advisor will give you the widest range of advice and products available to suit your requirements.

What makes an excellent IFA?

Excellent advisors will have a consistent process for giving advice including these steps:

1. Risk profiling to see your attitude to risk and capacity for loss
2. Full fact finding to understand your current financial position and future aspirations
3. Cashflow planning to ensure you never run out of money

Once they have made an assessment of your situation they will produce a recommendations report detailing suitable investments for you.

The quality of the initial advice is critical so you are on a sound footing to optimise your wealth over your lifetime. However just as important is a consistent ongoing service where your investments are reviewed, preferably every six months, and the funds you are invested in are analysed regularly.

Whether you are looking for a Wealth Manager or IFA here’s 5 questions to start you on the way to finding the right one for you:

Question 1 to Ask: “Do you offer restricted or independent advice?”

If unbiased advice is important to you then be sure to ask your shortlist of advisors if they are truly independent. If they are not then probe to find out the effect this will have on any recommendations they give you if you were to engage them.

Question 2 to Ask: “Please explain your client journey and ongoing service to me.”

Any decent advisor will want to manage and be accountable for your investments ongoing. Sadly many still do not offer the level of service clients deserve. It is imperative you understand every part of their process from an investment and customer service point of view.

Question 3 to Ask: “Does your service include full lifetime cashflow planning?”

Unless you know the number you need to aim for to have in your pension pot how will you feel comfortable in retiring? And once you have retired without referring to and updating this plan how will you know you won’t run out of money?

Question 4 to Ask: ”Please explain your fees to me.”

Advisor fees should be clear and transparent. If they are not published clearly on the advisor’s website there are questions to be asked about consistency and accountability

Question 5 to Ask: “Do you offer a service guarantee?”

Nobody can expect a guarantee of investment returns though it’s perfectly reasonable to know what happens in the event that you are not happy with the levels of service in your first year as a client with a new advisor.

Interested in finding out more?

Seeking a second opinion on your financial future costs you nothing.

Simply call our friendly team on 0121 355 4455 or drop us an email to appointments@oaklandswealth.com to arrange a confidential chat.

Oaklands Wealth Management, founded by Helen Blackburn in 2004 advises clients around the Midlands on retirement planning, pensions & investments.

Her firm holds British Standard BS 8577 for client service & investment process.

Minimum investment is £500,000 (£650,000 for pension transfers).