Questions to ask a Wealth Manager

Discussing your finances can be daunting, whether with an existing wealth manager or seeking someone new. It can be particularly difficult if you’re concerned about your portfolio's performance or unfamiliar with investment terms. However, an open yet informed approach is essential to ensure your financial objectives are properly understood and addressed. We have compiled some questions that may kickstart this process, and Rob Burgeman, Investment Manager at RBC Brewin Dolphin, has provided his insights.

How do you start a conversation with a wealth manager if your portfolio is not performing as you would like it to?

The wealth management industry faces a challenge in that advisers often know their clients well, which can make clients reluctant to voice concerns about portfolio management. After all, we probably know our clients better than almost any other profession does; your lawyer might know about your legal affairs, and your accountant might know about the tax you've got to pay, but we know people’s dreams and aspirations. You get to know people very well over many years and decades and see their lives change.

The solution, then, is for advisers to encourage open conversations, acknowledging the difficulty in raising concerns. While performance-related issues are typically addressed upfront, administrative problems may go unspoken, even if clients are unhappy. It’s important to have open and transparent communication to maintain a healthy client-adviser relationship, whatever the issue.

So how long is your average relationship with a client?

Client relationships tend to be long-lasting. You lose some clients over the years, but the majority stick around if you do things right. In the UK, people tend to be quite reserved when it comes to their finances. When people come into money, they can often struggle due to a lack of financial education. Many are unfamiliar with the concepts and language around insurance, loans, pensions, and savings. So, when you develop a relationship with a client, it usually lasts.

Do clients struggle to admit that they don't know anything about finance?

It depends on their situation. If you’re unsure about financial matters, you often don’t know the right questions to ask – and asking the right questions is crucial.

For example, many entrepreneurs turn to their bank for advice after selling their business. While understandable, banks are limited in the advice they offer and sometimes, seeking advice elsewhere is a good call, since it’s usually more impartial.

It’s important that people understand that when looking at financial planning, there is no one-size-fits-all solution. You have no certainty about how people's plans are going to evolve or what the tax situation will be in the years to come.

Financial planning is like building a portfolio; you need a mix of assets for different needs. You need to consider cash savings and pensions, but you also need rainy-day money. Regular reviews are essential as life changes, ensuring your financial plan stays relevant. It's a journey with twists and turns, so planning should be an ongoing, iterative process.

Many people don’t know where to start when they receive money suddenly. What questions would you suggest they ask when selecting a wealth manager?

Firstly, ask about the organisation and team you are dealing with. How are they structured? Who will I be dealing with and what are the succession plans within the team? After all, if you are going to establish a long-term relationship with a firm, it is important to understand how that might evolve over the next ten or fifteen years. Does the organisation share your values, both personally and professionally? Check if they have a diverse team catering to different preferences. Since relationships in finance are often multi-generational, ensure the team is equipped to handle that. Don't shy away from asking about their team structure and hiring practices.

It's crucial to have a breadth of options tailored to your unique circumstances. Ask if they can explain things in plain English – no jargon, please! Communication is key, and you want someone who listens to you and can explain complicated concepts and solutions in simple language. Again, regular reviews are vital for adapting to life's changes, so check these are offered.

Find someone that you can relate to not just at a personal level, but also someone who can help you learn and understand - “I know exactly what she/he is doing with my money” should be the outcome, not an aspiration. Remember, there's no one-size-fits-all solution, so feel free to ask questions and find an adviser who understands your individual needs.

So rather than what kind of questions I should be asking, should I check whether my wealth manager is listening to what I'm saying?

Absolutely! Potential clients have varying levels of knowledge. You have to take them on a journey and get them to a point where, over the years, they learn and understand better. People's needs, requirements and views are very fluid, so most people cannot say with certainty where they will be when they retire.

Whether discussing investments or broader financial planning, the process should be about making complex topics relatable. Avoiding jargon, focusing on real-world impact, and ensuring plans are adaptable over time are key. A good wealth manager regularly reviews a plan to ensure it aligns with the client's evolving needs, whether they are retiring at 65 or buying a yacht. Flexibility is key.

You talked about regularly reviewing the plan, so how many times a year would you revisit it?

Sometimes there are periods where very little may change, and at times like these, an annual review is probably sufficient to ensure the financial plan is still on track. However, as you approach retirement (for example), more frequent meetings may be needed as it is crucial to reassess and adapt. Retirement, much like starting a job, takes time to settle into. While grand plans may evolve, the "new normal" of retirement involves establishing new goals and objectives. Once this period is worked through, you review as often as you need to review, but once a year I'd say is probably enough to make sure that nothing's changed, and ensure nothing crucial is overlooked. The relationship with your wealth manager is like having a financial partner – always there, on call, and approachable, going beyond just performance metrics.

Do a lot of clients review and query costs and charges?

It is common for people to review interest and fees and question why they're being charged a certain amount. Clients must understand what they're getting for the price and whether they value those services. At our end, we prioritise transparency – our charges are clearly outlined on our website.

Would you say transparency is important when it comes to fees and charges?

Transparency when it comes to fees is important in building trust and fostering a positive client experience. We believe in providing clear and upfront information to help our clients make well-informed decisions based on their financial goals and values. Our approach prioritises open communication and ethical practices to allow clients to feel confident in understanding all the costs involved and make decisions that are right for them.

Do clients want to know exactly where their money is being invested and do they suggest where it should be invested where?

When it comes to understanding where their money is invested and suggesting investment allocations, clients have varying levels of engagement. This is understandable and reflects people’s different levels of interest in financial matters.

Some clients have specific ethical considerations, so they might request that we don’t invest in alcohol companies, for example. Again, this is all perfectly normal as part of a bespoke service. What is important is that the consequences of these exclusions (or inclusions) are explained and articulated. One of the skills of the wealth manager is to have big ears, to listen to what clients are truly saying, and to explain what those decisions mean. It’s a question of taking them with you rather than simply ticking boxes.

Is there time for you to pick individual stocks or do you have arranged portfolios that you offer your clients?

A lot depends on the degree of sophistication clients have and how complex their needs are. For someone with a relatively straightforward situation, a simple, cost-effective solution might be appropriate. It's about finding a suitable approach that aligns with their goals. On the other hand, if there's a need for more in-depth management for larger portfolios or specific requirements, a more bespoke approach is considered. It's about striking the right balance between complexity and simplicity, ensuring the chosen solution aligns with the client's needs and preferences.

If you were to look for a wealth manager for yourself, what would be important for you?

It's all about finding the right fit for you in the world of financial planning and wealth management. We are introduced to a lot of clients through recommendations because they don't know who to go to. So, I’d get recommendations from friends and conduct my own research by meeting with a couple of firms. I wouldn’t be swayed solely by a famous name or a royal connection; I’d focus on what truly matters to me.

I’d check online, do a bit of research, and trust my instincts. Different firms may offer similar services, but it's crucial to find one that aligns with your values and preferences. Trust plays a part, and considering the size and scale of an organisation can give an insight into its financial stability. Remember, what works for one person may not work for another, so it's about what suits your unique needs and goals.

Which qualities would you say are a “must”?

Honesty, transparency, and empathy. Those, to me, are key characteristics. At the same time, recognising vulnerability is crucial as a financial adviser. Whether someone recently sold a business or is navigating finances after losing a partner, each situation is unique. Empathy plays a key role. Treating people with respect and understanding goes a long way.

How do you set up goals for a client? In amounts or dates?

Setting goals for clients can be tricky because they often change. While some have specific financial objectives such as retirement or passing wealth to their kids, others might have more subjective goals, like (occasionally) “I want to buy a Maserati”. It also depends on, whether you look at the goal from an investment or a wealth manager perspective.

What would be the difference in the approach of a wealth manager and an investment manager?

A wealth manager takes a comprehensive approach that considers a client’s complete financial picture beyond just investments. This includes pensions, inheritance planning, long-term savings, and personal goals. The key distinction from an investment manager is designing a personalised plan to align their finances with their goals. Investment management is a crucial part of this, but it’s part of a broader wealth management strategy tailored to the client’s objectives.

Let’s say I sell my business and suddenly receive £1m or £2 million cash, is there a minimum requirement to get the services of a wealth manager or investment manager?

We do have minimum investment thresholds, but in this scenario, you’d have access to different portfolios and wealth management services.

What type of services would a wealth manager offer?

Inheritance tax planning, pensions, investments, savings and protection.

What are the risks associated with working with you?

We have strong governance and stringent controls in place to reduce risk across all levels - individual, team and organisational. Robust policies and procedures ensure ethical conduct and regulatory compliance. This comprehensive approach ensures we look after our clients’ interests.

If I’m looking for an expert to help me with my finances, should I go to an investment or a wealth manager? 

For most people, the answer would probably be a wealth manager. That’s because most people need help with their wider financial circumstances rather than simply investments. The wealth manager would look at the whole picture, considering what money you owe, critical illness coverage and protection, pension provision, estate planning, and so on. Investment management might well be included in one or several of these areas, but the focus should be on making sure that that broader picture is as it should be.

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