Do you ever feel overwhelmed when you try to choose a doctor, a contractor, or another business professional? How will you know if you will like them or work well with them? With so many choices, how do you narrow it down to determine who will be the right fit for your situation and personality?
When it comes to choosing a financial advisor, the professional you choose to handle your family’s wealth will have a significant impact on your investment strategy, the fees you pay, and your confidence in your financial future. Selecting an advisor is not a decision to take lightly, especially since each advisor has a different level of service, expertise, and ability. Taking this into consideration, it is imperative that you tread carefully as you seek to find an advisor that meets your needs and makes you feel at ease. For this reason, when you start your advisor search, ask potential advisor candidates the following 10 questions:
1. How Much Experience Do You Have?
Experience is essential when you are working with a professional of any kind, especially someone handling your finances. Do not be shy about asking an advisor about their industry experience. It will give you peace of mind to know which market conditions they have experienced and how many years they have been working in the industry. At Semita Asset Management, we have a healthy blend of seasoned professionals with great wisdom, as well as up-and-coming, highly-talented younger professionals who focus on evolving and creative solutions to meeting our clients’ needs. As founder of the firm, I have 46 years of industry experience, and the principals of our firm have worked together in the investment advisory business since 2004.
2. Do You Hold Any Credentials?
We take credentials and continuing education seriously. We believe you should too as you interview prospective advisors. Credentials and education play a critical role in your advisor’s competence. There are hundreds of designations in the financial services field. Some are more applicable to your needs than others. (1) Each member of our team is properly registered and licensed with the investment adviser regulators. Additionally, two of our team members hold MBAs, one of whom also holds the Chartered Financial Analyst (CFA®) and Certified Investment Counselor (CIC®) designations. Another team member is currently pursuing his Certified Financial Planner (CFP®), having recently passed the CFP® Exam.
Two members of our team also boast a unique credential, the Certified Kingdom Advisor (CKA®). With this credential, we provide professional guidance while also incorporating biblically-grounded financial planning and management truths into our wealth management practice. With over 2300 verses about money and possessions in the Bible, we believe time-tested financial principles are provided to us. Therefore, with the abundance of direction provided to us in the Bible, we believe that the financial guidance that we provide our clients, and the manner in which we and they manage their personal finances are important in God’s sight.
Use DesignationCheck.com to learn more about the credentials financial advisors can earn, and ask the advisors you are researching what they do to continually hone their skills and stay up-to-date in the industry.
3. What Financial Planning Services Do You Offer?
Not all financial advisors can provide comprehensive financial planning. Some cannot sell insurance or securities, such as variable annuities, mutual funds, or stocks, if they do not have the appropriate licenses. Ask a prospective financial advisor which services they provide, whether or not they have a specialty, and if they offer a broad spectrum of solutions to meet your needs. When creating a plan together, be sure to ask your advisor why they are recommending particular services and solutions over others. At Semita Asset Management, our comprehensive planning process includes financial goal planning, investment management strategy advice and implementation, personal financial consulting, estate planning, and Social Security benefits analysis, among others.
4. What Is Your Planning Philosophy?
It is important to work with an advisor who shares a worldview and philosophy similar to your own. Talk with the prospective advisor about how he or she guides clients’ longer-term financial planning, investment strategy, and ongoing financial decisions. A quality financial advisor will get to know your financial story, goals, and risk tolerance. Learning more about you enables a quality advisor to create, review, and help you maintain a healthy investment portfolio, taking into consideration your plans and goals for your financial resources, your tolerance for market volatility, investment suitability, tax-efficiency, and diversification.
We believe that clients should invest in order to achieve their specific personal financial goals, balancing those goals with their personal tolerance for market volatility. Our strategies are customized to your situation, yet adaptable to change. When your life evolves, so should your strategies. Whatever you hope to achieve, our investment management strategies are built to help you accomplish your financial goals, manage your wealth for the next generation, and minimize the burden of taxes.
5. Who Do You Serve?
Some financial advisors specialize in serving a specific demographic or level of investable assets, so you will want to find this out before choosing an advisor. For example, if you are a business owner, you may be better-suited working with an advisor who specializes in helping business owners. If you are a retiree or beginning to plan for retirement, you may want to select an advisor with considerable experience serving retirees.
While we work with clients from all stages of financial life, our ideal clients typically share our values: they desire to use their resources wisely as they seek to accomplish specific financial goals, they understand that having a plan for their resources will make them more content, and they have a strong urge to use their resources to have a more meaningful impact on their families, friends, and communities. We enjoy working with clients in all stages of life, from those in the earlier stages of accumulating wealth to those entering retirement and beginning the wealth distribution phase in their later years.
6. Who Else on Your Team Will Be Working with Me?
At some firms, you may work with multiple financial advisors, while other firms may pair you with one financial advisor with whom you will work one-on-one. It is important for you to understand with whom you will be working when you enter an engagement with a new advisor. Working with a sole practitioner as opposed to a team of professionals can definitely impact the quality and longevity of the services you receive.
As your strategic partner, we separate ourselves from other firms by adhering to our disciplined and time-honored approach. We believe that you are served best when you work with a team, as each member of our team has a unique skill set that enables them to meet an area of your financial needs effectively. Additionally, working with a team provides greater continuity if something should happen to one of your advisors. This is a weighty concern if you elect to work with a firm that will only assign one advisor to work with you.
7. How Much Do You Charge?
Financial planning and investment costs can be confusing and / or not easily apparent to clients. Too often, financial advisors do not readily disclose all potential fees their clients or prospective clients are likely to incur. When you are searching for a financial professional, look for transparency in exactly how they are compensated, making sure their recommendations are not influenced by any affiliations or personal conflicts of interests. While transparency on fees may not weed out every advisor who is not likely to bear your best interest in mind, fee transparency can inform and empower you with information and put your evaluation process between potential advisers on an even playing field.
As fee-based advisors ourselves, our clients know what they are paying and what they are receiving in return. Our fees are based upon a percentage of assets that we are engaged to manage for our clients or a pre-approved fee for the development and completion of a client’s longer-term financial goal plan. Our fee structure facilitates transparency and objectivity to ensure we remain fully aligned with the individuals, families, and organizations that entrust their financial futures to us. We want our clients to feel comfortable with the strategies we implement to help them achieve their goals and confident that there are no hidden or unreasonable fees eating away at their hard-earned savings.
8. Do You Receive A Commission?
Some financial advisors earn their income on commissions. The problem with this method of compensation is that advisors working on commission may be inclined to sell products that aren’t best suited for a client’s needs, perhaps even “churning” (engaging in excessive trading) for the sole purpose of generating commissions for themselves. Other advisors will try to sell annuity or life insurance products that will provide them with a steady “trail” of income.
Yet, other financial advisors earn both commissions and charge advisory fees as well. Staying aware of all the possible fees, charges, and expenses you will incur with your advisor is a valuable evaluation point you will want to consider.
As fee-based independent financial advisors, we charge a percentage of your assets under our management for our wealth management services. The stronger your investment performance, the more our you earn; and hence, the more we earn. In an effort to avoid potential conflicts of interest, we do not accept direct compensation from third-party investment sponsors or brokerage firms as a direct result of our investment activities on behalf of our clients.
We do offer planning-only services on a fixed or hourly consulting basis to clients who may not qualify for our complete wealth management package.
9. Are You A Fiduciary?
An advisor who serves as a fiduciary accepts a responsibility to put their clients’ interests first and foremost in all decisions. A fiduciary is obligated to avoid conflicts of interest and remain unbiased as they provide recommendations and advice. We agree to abide by a strict code of professional conduct, and, as fiduciaries, we believe in transparency and putting our client’s needs ahead of our own.
10. Have You Ever Violated Any Standards or Laws?
It is a good idea to research an advisor’s credentials and to run a background check with regulatory agencies. Some advisors may have been subject to disciplinary action if they violated any laws or if a client took action against them. You can review an advisor’s professional history by visiting FINRA’s BrokerCheck. This database will also show you the years of experience an advisor has and the licenses and credentials he or she has. Neither our firm nor our professional advisers have experienced any regulatory complaints due to infractions or any misconduct.
Take Your Time and Trust Your Intuition
When selecting your advisor, the relationship should feel right and you should never feel pressured to make a decision quickly. A prospective advisor should be happy to answer the questions above and any others you may pose about how they operate. More importantly, the prospective advisor should ask you questions, demonstrating a genuine interest in your financial experience, story, and life. If you do not know where to start, ask friends and family for referrals to set you on the right path.
At Semita Wealth Management, we believe in complete transparency and want our clients to feel comfortable working with us and asking us questions. If you would like to learn more about our answers to these questions or any others you may have, do not hesitate to reach out to us for a complimentary meeting. To get started, book your free introductory meeting online today!
Michael Meagher is the Chief Executive Officer and Chief Investment Officer at Semita Asset Management LLC with more than 46 years of industry experience. He specializes in providing strategic, goal-based financial planning, risk management, retirement planning, and portfolio management services. Michael graduated from the University of Houston with an MBA in finance and holds both the Chartered Financial Analyst (CFA®) and Certified Kingdom Advisor (CKA®) designations. Learn more about Michael by connecting with him on LinkedIn.
CFP® () and CFP® () in the U.S., which it awards to individuals who successfully complete CFP Board’s initial and ongoing certification requirements
*The designation of Chartered Financial Analyst [“CFA”] is conferred by the Chartered Financial Analyst Institute, Charlottesville, Virginia www.cfainstitute.org. The CFA candidate must meet the following requirements to be eligible for the designation:
1) Possess of an undergraduate degree plus four (4) years professional experience involving:
- Evaluating or applying financial, economic, and/or statistical data as part of the investment decision-making process involving securities or similar investments, which includes, but is not limited to, publicly traded and privately placed stocks, bonds, and mortgages and their derivatives; commodity-based derivatives and mutual funds; and other investment assets, such as real estate and commodities, if these other investment assets are held as part of a diversified, securities-oriented investment portfolio; or
- Supervising, directly or indirectly, persons who practice such activities; or
- Teaching such activities, and
2) Successfully complete a study program that culminates with three (3) levels of examination each of which requires approximately 250 hours of study and preparation. The CFA Institute has a non-mandatory, or voluntary, program regarding continuing education requirements for the CFA charter holder.
**The designation of Certified Kingdom Advisor® [“CKA”] is conferred by Kingdom Advisors, Atlanta, GA www.kingdomadvisor.com The CKA candidate must be a disciple of Christ who has committed to be a person of character who, from a biblical worldview, serves clients with biblical financial advice in order to properly steward the resources entrusted to them. Kingdom Advisors has created the Certified Kingdom Advisor® designation to provide confidence to those looking for financial counsel from a biblical perspective. The Certified Kingdom Advisor® designation is given to advisors who:
- Complete the Kingdom Advisors’ Core Training
- Provide evidence of their technical competence
- Commit to personal stewardship
- Assert their belief in Jesus Christ
- Provide evidence of their personal integrity
- Commit to incorporating biblical wisdom into their financial advice