Financial Advisor Due Diligence
Choosing a wealth manager can be a stressful process. You’re actively searching for a person who will very quickly have access to your assets, goals, family information, and other intimate details that you normally would only share with family and health professionals. Naturally you would want to know a lot about this person so that they are making themselves as vulnerable as you will be. They should be open to sharing information about their personal life, goals, interests, and other facts to make you feel more comfortable with the relationship. The good news is that with how regulated the advising industry is, you have access to a lot of their information already through regulatory disclosures.
Form ADV Part 2A & 2B brochure
The first one you should check out is the advising firms Uniform Application for Investment Adviser Registration or the form ADV Part 2A & 2B brochure. This form should be given to you prior to signing any advisory agreement. This provides information about the firm and their business including services the firm provides, their compensation structures, analysis strategy, disciplinary actions against the firm, code of ethics, advisors registered to that firm, and other good details you should know. It is a boring read but could help you decide before you even talk to the advisor. You can find this form for any registered advisor on the site below. If they don’t have one then don’t even bother with that firm.
Check their website.
Another good place to look is their website. Your business doesn’t exist if you don’t have a website. This will give you an idea if they invested the time, money, and effort to display their value to their clients. It should speak to you. If it doesn’t then it might mean they typically don’t work with clients like you. You can get a sense of the type of people who work for the firm, core values, investment philosophy, other services they provide outside of wealth management, pricing structure, and even their process for working with clients. ADV’s should be somewhere on their site as well.
After checking their disclosure forms and website, schedule a quick call to see if they jive with your needs. It’s common for clients to speak with a two or three advisors before making a decision. You should never be tied to one advisor. If it doesn’t work out you can always move but make sure you take transaction fees in mind if you move.
If you still want to dig deeper into your advisors I have listed some more sites below that will help you make sure they are clean.
This site allows you to look up information about individuals who have been named as defendants in SEC federal court actions or respondents in SEC administrative proceedings
BrokerCheck gives you a snapshot of a broker's employment history, regulatory actions, and investment-related licensing information, arbitrations and complaints.
https://brokercheck.finra.org/
This site explains the most common investor threats. If any of these sound familiar then it’s time to contact the regulator.
https://www.nasaa.org/investor-education/fraud-center/top-investor-threats/
It’s pretty easy to stay off of these sites. All you have to do is be a good person and be diligent about your duty to the client. Check out our site(you’re here already so why not?) and ADV and if we seem like the right fit schedule a call. I hope we get a chance to help you!
Fiduciary Mission
At Integritas Financial, we are committed to providing fee-only, fiduciary financial planning services that are tailored to the unique needs of young professionals, particularly millennials. Our experienced planners work with you to develop customized financial plans that address key areas such as estate planning, trusts and wills, retirement, workplace benefits, education funding, student debt, and buying a house.
We believe in transparent, client-focused service that puts your financial goals at the center of everything we do. As a fiduciary firm, we are dedicated to acting in your best interests, and we never sell products that charge commissions to clients.
Our goal is to help you achieve a stable and prosperous financial future by providing comprehensive financial planning services that are tailored to your individual needs. Whether you're just starting out in your career or you're already well-established, we can help you navigate the complexities of financial planning and create a roadmap for success.
Ryan@if-money.com