It’s not hard to find a wealth manager; the challenge is finding the right one. How do you know which one will be the best fit for your situation or personality? How do you know if you’ll like them or work well with them?
The financial professional you choose to handle your family’s wealth will have a significant impact on your investment strategy, awareness of financial planning opportunities, and your confidence in your financial future. This is not a decision to take lightly, especially since each manager has a different level of service, experience, and ability. Taking all of that into consideration, it’s vital to take your time to find a manager that meets your needs and makes you feel at ease. So, when you begin interviewing wealth managers, ask the following 13 questions.
1. Are You a FULL-TIME Fiduciary? (And Why That Matters)
This question is important because it tells you whether the manager is legally required to put your best interests first, at all times. It can also highlight areas where there may be conflicts of interest between the manager, their company, and you.
Anderson Financial Strategies is a Registered Investment Advisor (RIA), which means we’re required by law to act as a fiduciary at all times. We are also completely independent, which allows us to manage investments that are in the best interest of our clients, rather than a limited selection designed to financially benefit people other than you.
How can you know for certain that a wealth manager you’re interviewing is a fiduciary at all times? Or if the firm itself is a Registered Investment Advisor, or the manager holds licenses/designations that require a fiduciary standard, including CERTIFIED FINANCIAL PLANNER™, Chartered Financial Analyst®, and Certified Public Accountant? If none of those apply, the manager typically only has to act as a fiduciary when discussing a particular recommendation, and not when selling products/investments. Another great test: ask the manager to put it in writing!
Perhaps a better way to ask: When are you NOT a fiduciary?
2. What Are Your Credentials?
Credentials in the world of financial services are a bit like the wild west. Our industry is very different from medicine, law, and many others, where certain prestigious credentials are required to practice (like an MD or JD). For wealth managers, there’s no requirement for formal financial education or credentialing through college degrees or designations.
We may be biased, but we believe the education and designations of a manager are extremely important and demonstrate their serious commitment. We’ve learned strategies and concepts through our degrees and designations that drive our portfolio construction and financial advice, which immensely benefit our clients. Lacking the knowledge we gained from these prestigious programs would certainly diminish our ability to help our clients.
The Anderson Financial Strategies team holds several finance and business degrees. Along with my MBA, I hold the gold standard designation of portfolio managers, the Chartered Financial Analyst (CFA®), as well as the CERTIFIED FINANCIAL PLANNER™ designation. Scott Schwalich is a CERTIFIED FINANCIAL PLANNER™ professional, Tim Brown holds the Accredited Investment Fiduciary® designation, and Jessica Anderson obtained a Juris Doctor degree.(JD)
Learn more about these top-tier designations here:
- CFA®: https://www.cfainstitute.org/en/about/employers/hire
- CFP®: https://www.cfp.net/why-cfp-certification/the-standard-of-excellence
- AIF®: https://www.fi360.com/what-we-do/learning-development/aif-training/aif designation/
3. How Are You Compensated for Your Services?
Anderson Financial Strategies is a fee-only fiduciary firm, and we prioritize transparency in our client relationships. The most common way we are compensated is by an Assets Under Management (AUM) fee, which is paid monthly, based on the value of your assets we manage. There are no other hidden costs and we’re not compensated through things like revenue sharing, commissions, sales loads, or sales contests. This means we’re paid for our unbiased advice only, and aligns our compensation with your best interests.
We are also part of NAPFA (The National Association of Personal Financial Advisors). Part of our membership requires us to adopt a fee-only fiduciary oath.
Our AUM fee covers our ongoing investment management and comprehensive financial planning services for clients with $500,000 and above of managed assets. There are never any long-term commitments, penalties, or exit fees, and you are free to end our relationship at any time. We believe in providing premium service and value that drives long-term relationships with clients, not by locking them into long-term strategies that don’t offer flexibility.
4. What Is Your Investment Philosophy/Approach?
Our approach to portfolio management is unique because of our institutional methodology. We believe in taking a scientific, evidence-based approach with our portfolios. With our inclusion of 16 asset classes, along with how they relate to each other and the market/economy as a whole, we focus on building portfolios that target specific rates of return for minimum volatility.
The only way to truly accomplish this is to utilize many more asset classes than what you’ll traditionally find at most firms. The research shows that the most important factor in a client’s portfolio is their percentage allocation to each asset class (including the asset classes many other wealth managers do not incorporate).
To summarize, we focus on optimizing your allocation for the targeted return that your financial plan and goals require while assuming the least amount of risk.
5. What Types of Clients Do You Specialize in Serving?
While we serve clients across all stages of life, we specialize in working with executives, business owners, and families preparing for or are currently in retirement, and who’ve saved at least $500,000. That group makes up the vast majority of our client base, and it’s where we feel we can add the most value with our expertise.
Retirees: We help them create a financial plan based on their retirement and life goals and manage their portfolios to achieve a financially sustainable retirement with minimal risk during market downswings.
Strategies we incorporate with clients preparing for and in retirement include:
- Minimizing taxes over the course of retirement through long-term tax planning
- Developing an estate plan strategy to leave assets to whom you wish in the most efficient and tax-conscious way possible
- Developing a plan for a potential long-term care need, whether it’s an insurance policy, using home equity strategically, or another strategy
- Optimizing when to take Social Security based on your goals, tax situation, personal situation, comfortability with break-even points, and more
- Advising clients on making optimal choices on when to enroll in Medicare and which plans may be right for their individual needs
6. What Is the Size and History of Your Firm?
I started the firm in 2012 after being a wealth manager at UBS and Merrill Lynch for a combined 10 years. Today, we are a team of 7 with over 75 years of combined industry experience:
Intentional about our firm’s size, our first priority is maintaining a very high-touch and personal level of service and communication with all current clients. While still looking to grow by adding new clients who are the right fit, we are committed to the value we bring to our clients’ lives through our partnership and close relationship, and we refuse to grow in a way where our clients feel like just a number.
7. How Long Do You Plan to Practice?
Much like finding a new doctor, many of our clients express concerns about not wanting to work with a wealth manager too late in their career to avoid having to find a new manager in the middle of their retirement. Great news: We are younger than the average wealth manager and we have families with toddlers and infants that are all going to need braces and college tuition (not to mention, we absolutely love our work and our clients!).
In other words, we aren’t going anywhere for multiple decades, so we don’t anticipate our retiree clients will ever need to worry about looking for a new manager and starting a new relationship. I’m not shy about telling our clients that I’ll never sell the firm and how much I enjoy all aspects of the business.
8. How Do You Envision Our Relationship Working?
Everything we do is designed to deliver 3 things to our clients:
- Confidence in all aspects of your financial life
- Strategic expertise toward reaching your goals
- The feeling of access and constant communication
To accomplish this, we begin by really getting to know our clients while they’re evaluating our firm. We get crystal clear on your goals and financial situation and create a first draft of your financial plan.
Once you decide to partner with us, we have an onboarding meeting to really dial in your financial plan and strategy together. We’ll also introduce you to the rest of the team and explain the best ways to reach us whenever you have a need or question.
Once you’re a client, we meet every quarter to talk about your financial questions and what’s changing in your life, financially or otherwise. We do a deep dive into an area of financial planning at each quarter’s meeting, and currently those are retirement planning (1st quarter), estate planning (2nd quarter), insurance planning (3rd quarter), and tax planning (4th quarter). We revisit your retirement plan at least once or twice a year to make sure it remains sustainable throughout any major changes or events. We also review your cash flow needs and portfolio performance at each quarterly meeting.
Aside from meeting quarterly, we hold regular webinars for clients that discuss our in-house research on what’s happening with the economy and markets, and what we expect going forward.
And of course, you’re always encouraged to reach out to us if you need anything; someone will respond within 24 business hours, or typically the same business day. Furthermore, our clients have our cell numbers and are welcome to call/text when something urgent comes up (even if that’s on weekends and holidays), as we want to be there for our clients when it counts.
9. How Do You Measure Success With Your Clients?
We measure our success with clients based on two categories: YOUR criteria for success and our own internal criteria for success.
When you’re first exploring our firm, we let YOU define what success would be in a relationship with us. Then we regularly revisit your criteria to make sure we’re exceeding expectations.
Our internal criteria for success consist of measuring what you might expect, as well as what you didn’t. Part of our job is to highlight any blind spots you may have in your financial plan. (Example: You’re retiring at 65 with a large portion of your portfolio in pre-tax retirement accounts. Your Social Security income plus required minimum distributions are going to put you in a higher tax bracket and higher Medicare Part B premium starting at age 72 and beyond. We’ll forecast that out and discuss years in advance how to strategically move your pre-tax money to mitigate your tax burden and keep your Medicare premium as low as possible.)
Other factors we measure and benchmark for our definition of success with clients include:
- Your degree of financial confidence
- Portfolio performance
- Reducing your lifetime tax liability
- Helping you obtain/confirm adequate insurance and/or risk management protection
- Helping you obtain/confirm an estate plan with documents/beneficiaries in place to pass your assets down as you wish with minimal tax liability
- Your ability to enjoy other areas of your life and the freedom you experience from knowing all of these financial matters are being meticulously monitored by us
- Staying on track to achieve your goals
10. Who Will I Primarily Be Working With?
Our private clients primarily interact with Shon and Scott as their managers, as well as Allison or Sarah for administrative items. You may interact with Tim, Randy, or Jessica from time to time for specialized needs, but they wouldn’t be your regular contacts. Someone from our team will always be available to assist you within 24 business hours, but often much sooner.
11. How Do You Help Me Make an Informed Decision About Hiring Your Firm?
We’ve designed an evaluation process of our firm that allows you to make an informed and educated decision about partnering with us. Not only that, but you’ll walk away with some strategies and insights that will help you evaluate other wealth managers you may be exploring, or it’ll provide you with some solid ideas if you decide to implement things on your own. We believe you should be able to visualize and feel the value that our expertise (or any other manager) can offer you before you decide to invest a penny of your savings with us or pay us a dime.
12. What Separates You From Other Wealth Managers?
We believe we do four things very differently than most managers:
- Our morals and commitment to our clients: We build our client relationships on integrity, loyalty, honesty, transparency, and honoring our oath as fiduciaries. We’re committed to having frequent (almost continuous) communication with our clients.
- Our financial planning: The true value a client receives with a financial plan is all in the continuous planning and implementation done throughout their life, not just an initial cash flow plan. Take personal trainers as an example: how many clients would reach their fitness goals if all the trainer did was give them one initial workout plan to follow forever? This would work for almost no one. The same is true with an initial financial plan. How clients achieve their goals and follow through with what needs to be done to achieve those goals is by having a wealth manager who keeps them accountable with implementing the plan, AND who continuously tweaks and adjusts the plan to account for all the changes we don’t see coming. No one knows for certain what lies ahead in life, what tax rates will do going forward, what laws may change, what will change in the markets and economy, etc. We remind our clients that we’re here for them every step of the way, and our planning never stops.
- Our portfolio construction: Stemming from the world’s most recognized portfolio management education program, the CFA Institute, we use a scientific, evidence-based approach to creating portfolios that are as efficient as possible. This means that we use an asset allocation that takes on the least amount of risk and volatility for a given targeted return.
- Our process: When you explore working with us, you’ll get to experience what it’s like to work with us, receive an initial financial plan with a one-page summary of strategy and recommendations, and we really get to know what’s important to you. We want you to make an educated and informed decision about any wealth manager you choose to work with, whether that’s us or another firm.
13. How Can I See My Investments and Financial Plan?
You’ll get a login to TD Ameritrade Institutional, a qualified custodian where we hold private clients’ assets. TD Ameritrade protects your assets from fraud, provides all necessary reporting for trades and tax forms, and provides monthly statements. They also have a fantastic mobile app that many clients enjoy. By using the institutional wing of TD Ameritrade rather than the retail wing, we’re able to utilize institutional grade investments that lower your costs and fees.
You’ll also receive a login to our performance reporting software, Morningstar Office Client Portal, as well as your financial plan from MoneyGuide Pro. You’ll be able to access all platforms at any time directly from our website.
We’re Here for You
We know you have a wealth of options when it comes to selecting a wealth manager, and we at Anderson Financial Strategies would be honored to partner with you on your financial journey. If you would like to explore our services for your family or business, please call us at 855-237-4545 to schedule an executive briefing to discuss your goals.
About Shon
Shon Anderson is president and chief wealth strategist at Anderson Financial Strategies, LLC with over 15 years of experience. As a fiduciary, Shon’s mission is to provide his clients with quality financial expertise along with rapidly responsive service through an honest relationship. He specializes in providing family office-style services to help his clients organize and focus their financial life. Shon graduated from Wright State University with a bachelor’s degree in financial services and an MBA in finance. He is a CERTIFIED FINANCIAL PLANNER™ practitioner and holds the Chartered Financial Analyst® (CFA®) certification. His insights have been quoted in leading financial news publications such as CNBC, Yahoo Finance, Fox Business, Consumer Reports, Forbes, Bankrate.com, Investment News, and Kiplinger. Shon serves as an adjunct professor teaching personal finance courses at Wright State University, leads CFP® exam review courses for Keir Educational Resources, and is president of the CFA Society Dayton. Shon and his wife, Jessica, reside in Sugarcreek Township, Ohio, and are blessed with triplet daughters, Elizabeth, Bridgette, and Alexandra, along with their son, Jacob, and dog, Jack. Over the years, Shon has been involved in several volunteer organizations including the Wright State chapter of Delta Tau Delta as an alumni advisor and was a Big Brother in the Big Brothers/Big Sisters program. To learn more about Shon, connect with him on LinkedIn.