Essential criteria for choosing your wealth management advisor

Choosing a Wealth Management Consultant (WMC) is crucial to optimising the management of your wealth, whether in terms of property investments, tax planning or financial investments. These experts, valued for their holistic approach encompassing financial planning, tax planning and investment management, often work with high net worth individuals to develop personalised strategies. ¹². In France, with around 3,500 independent CGP firms, these advisers play a role comparable to that of a general practitioner for wealth, offering a personalised service to effectively manage the financial resources of individuals, families and businesses. ³⁴. Around the world, EY amounted to 225 000 the number of wealth management advisors in 2019, Capgemini expected 320 000 professionals in 2020.

Faced with a rapidly expanding market, it is essential to understand the determining factors in choosing a wealth management adviser who is suited to your needs. This article therefore sets out to detail the criteria for selecting a good adviser, the different types of adviser available (independent, firm or bank-affiliated), and the precautions to take before committing yourself. In addition, the importance of checking the credibility of your adviser and understanding the cost structure and associated fees will also be discussed, in order to avoid common pitfalls in this area and promote efficient wealth management. ¹²³⁴.

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Understanding the role of a wealth management adviser

A Wealth Management Consultant (WMC) plays a multifaceted role in managing your finances, offering personalised advice covering financial, insurance, legal and tax aspects. ⁵. These professionals have expertise in various fields such as law, finance and real estate, enabling them to provide impartial advice and help you make informed decisions. ⁷. Their main role is to enhance your wealth by preparing for retirement, making the right investment choices, optimising tax returns and planning your estate. ⁸.

Expertise and personalised advice A CGP assesses your financial situation and needs, advises you on investments and creates personalised strategies. They optimise your tax situation with appropriate solutions and monitor and evaluate the performance of your investments. ⁶⁸⁹.
Long-term support Our financial advisors: They are with you every step of the way, helping you to define your financial goals and create a long-term strategy. This includes a comprehensive view of financial products, life insurance, stock market investment, real estate and more. ⁵⁹.
Managing risks and saving time Wealth management advisers help you manage the risks associated with financial and investment decisions. They have the necessary knowledge and experience in asset and financial management, which can save you time by managing these tasks for you. ⁹.

The different types of wealth management advisor

In the wealth management landscape, it's vital to understand the distinctions between the different types of advisor so you can choose the one that best suits your specific needs. Here's an overview of the main differences:

CGP generalist : It offers services that cover all of the customer's wealth management needs. However, this generalisation does not allow for in-depth expertise in every area. To improve their case studies, independent financial advisers can work with other independent financial advisers specialising in particular areas, such as stock market investment, property or tax optimisation.

CGP specialised : It offers higher-quality services because its expertise is much greater, such as a financial investment adviser (CIF) who is a professional in investment advice and can further increase his specialisation in the stock, crypto or real estate markets.

This segmentation enables individuals to understand which type of adviser could best meet their expectations, depending on their assets and specific needs.

Criteria for selecting a good adviser

To choose a competent and reliable wealth management adviser, there are a number of criteria to consider:

Accreditations and regulations :
- Must be licensed or accredited by a financial regulator (such as the AMF for a professional in France, for example) or be associated with a structure under its supervision. ²⁰.
Remuneration and transparency :
- May be remunerated by fees or commissions on the purchase of financial products ²⁰.
- May receive affiliation-related remuneration by selling other institutions' services to its customers.
Qualifications and experience :
- Check the advisor's qualifications, education and experience.
- A good CGP must be able to diagnose your assets, understand your investor profile and your savings capacity, set objectives and follow the action plan. ²¹.
- It is advisable to check references by talking to previous customers to assess their experience and satisfaction. ²⁴.

Self-employed vs firm vs bank: The differences

Independent wealth management advisers offer a range of distinct services and benefits that are essential for effective, personalised wealth management:

Independent advisers :
1. Impartial advice Offer neutral advice and a wide range of solutions, without being restricted to the products of a single financial institution. ²⁸.
2. Partner : May nevertheless maintain partnerships with institutions and steer customers towards sponsorship products.
Banks and law firms :
1. Direct fund management Unlike independent advisers, who select suitable institutions for investments, banks manage clients' funds directly. ²⁸.
2. Limited products and services Tend to offer mainly their own products and services, which may not always be in the customer's best interests ²⁹.
3. A bigger team Independent advisers: Because the teams are larger, the expertise of a bank or firm can cover more aspects than an independent adviser. However, independent asset managers can work in partnership with other professionals.

Check your advisor's credibility

To ensure the credibility of your wealth management advisor, it is essential to carry out rigorous checks:

Verification of accreditations and regulations :
- Check the CGP's status on its website, that of its professional association, or via an official register held by a financial regulator. ¹⁸.
Verification numbers and codes :
- Make sure that the adviser has an official register number, a registered company number and any other financial services identification code. These identifiers confirm the advisor's good repute, competence, ongoing training and financial security. ³¹.
Transparency and partnerships :
- Remuneration must be transparent, with no hidden commissions ²¹.
- Assess the accuracy and reliability of the financial and property partners with whom the CGP works ³¹.

These steps will enable you to select a reliable and competent wealth management adviser, guaranteeing optimum management of your assets.

Understanding the cost structure and charges

Understanding the cost structure and fees associated with an independent financial advisor is essential before committing to their services. ¹⁹. Here is a detailed breakdown to make it easier to understand :

Types of charges :
- Fees Invoiced either on a fee-for-service basis or as a lump sum, ranging from 500 euros for simple tasks to 20,000 euros for complex operations. ⁴.
- Commissions On products sold, ranging from 0.3% to 3% depending on the type of investment. ¹⁶. CGPs also earn a significant proportion of their income from kickbacks on products sold. ⁴.
- Entry, management and exit feesas well as any performance fees ²¹.
Remuneration models :
- Fees based on assets under management (AUM) A percentage of the assets managed on your behalf is charged. ²⁷.
- Flat-rate fees For specific services such as estate planning or tax optimisation ²⁷.
- Hourly fees Hourly billing for services rendered ²⁷.

It is crucial to understand this structure before committing yourself and to compare the fees of several advisers. ²⁴. High charges that are not justified by the value of the services provided are a common problem. ²⁴.

Pitfalls to avoid when choosing an adviser

To effectively navigate the process of selecting a wealth management adviser and avoid potential pitfalls, here are a few key recommendations:

Prior consultation : It is advisable to meet with two or three advisers before making a final decision. ²¹. This stage allows you to compare offers, skills and approaches to ensure that they match your specific needs.
Verification of independence and qualifications :
- Make sure your advisor is completely independent to guarantee unbiased advice.
- Check the advisor's qualifications and experience to ensure that they have the expertise and ability to manage your assets effectively.
Warning against free services and unrealistic promises :
- Be careful with offers of free services, as they may be motivated by incentives to sell certain products. ²⁴.
- Beware of advisers promising unrealistic returns. Market fluctuations make guaranteed returns impossible, and any promise of this kind should be a red flag. ²⁴.

It is also important to regularly review and adjust your investment strategy in line with changes in your personal situation and market conditions. Ignoring these steps can lead to ineffective management of your assets, influenced by a lack of knowledge, emotional biases or failure to exploit investment opportunities or tax advantages. ⁹.

Questions to ask before making a commitment

Before engaging with a wealth management adviser, it is crucial to ask specific questions to assess their competence and the relevance of their services to your needs. Here are some key questions to consider:

Skills and areas of expertise :
- What skills do you have in areas such as finance, property, law, tax and insurance? ⁸
- Can you assess my assets and suggest investment strategies tailored to my situation, needs and objectives? ⁴
Decision-making and investment management :
- How can you help me make better investment decisions, maximising returns while minimising risk? ⁷
- Can you help me declare my tax income and provide clear and accurate reports? ²¹

These questions will help you to assess whether your advisor meets your expectations and will ensure that we work together successfully to manage your assets.

Conclusion

In this article, we have explored the various aspects and essential criteria to consider when choosing your wealth management adviser. From the importance of checking the advisor's credibility and qualifications, to considering fees and understanding the services offered, we've tried to provide you with a comprehensive guide to make this crucial decision easier. Selecting the right adviser for your needs is a crucial step towards optimising the management of your assets and navigating the often turbulent waters of the financial markets with confidence and peace of mind.

De Ravel Finance, a portfolio management and smart hedge fund company, is at your side in this quest for tailored, personalised wealth management. Please do not hesitate to contact our team to discuss together different investment solutions that match your profile and expectations. This approach represents a first step towards securing your financial future and optimising your assets, as part of a tailor-made investment strategy designed to meet your long-term objectives.

FAQs

How do you select a wealth management adviser tailored to your needs?

To choose a wealth management adviser, you can turn to private banks, which generally offer these services to high net worth clients, as well as insurers, mutual insurers and certain brokers. There are also independent wealth management advisers (CGPI) who operate independently.

What are the qualities of a competent wealth management adviser?

A good wealth management adviser is an expert who provides personalised advice and support to individuals in developing their savings strategy. They manage their investments, whether financial or real estate, and help them to achieve their financial goals.

What criteria should you take into account when choosing a reliable financial adviser?

When choosing a financial adviser you can trust, look for someone who is prepared to take the time to talk to you, share their professional experience and justify their recommendations. A good adviser should make information understandable, even complex information, and should be open to your questions. This is essential, because you are entrusting them with the management of your finances.

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