Things to consider before choosing a wealth manager
Entrusting your wealth to an investment professional is a decision that should not be taken lightly.
There are many reasons why it makes sense to appoint a wealth manager. Perhaps you want your money to work harder for you or it may feel like the right time to put together a financial plan to underpin your life goals. These can include things like funding your children’s education or perhaps your own retirement.
Alternatively, you may find that you are unhappy with your existing wealth manager or an investment portfolio that you manage personally, particularly during times of market stress.
Here are some important things to consider before deciding to outsource the management of your wealth:
What are your objectives?
Ahead of your first meeting, have a think about what you need and want from your money and when. This doesn’t have to be one goal or even one timeframe; you can have both short and long-term objectives in mind.
If you are not entirely sure about the ultimate purpose of the money that you want to invest, this can be explored and developed during your initial meetings with a wealth manager.
Bear in mind that these discussions are just the starting point. After the first meeting, the portfolio manager will have a much better idea about how a portfolio could be constructed to meet your needs and objectives. If you don’t understand something don’t be afraid to ask questions, after all this is your meeting and you need to be completely comfortable with the outcome.
How much risk are you willing to take?
One of the most important aspects that should be covered in your first meeting is risk.
Don’t be surprised if you feel like you are doing most of the talking during the meeting.
You may be asked about how you would feel in certain scenarios, for example losing 10% of your money. It is worth thinking carefully about your potential reactions to these types of situations and to draw on your previous experiences. During times of stress, you don’t always react in the way you might expect.
Also, how would you feel if markets increased sharply and your portfolio did not fully participate?
How much will it cost?
Excessive and opaque fees eat into the potential returns that your portfolio makes. You should have an open discussion about fees and charges during your initial meetings.
A wealth manager will be able to show you the proposed fee that would be charged on the overall portfolio and how it breaks down. For example, how much goes to the wealth manager versus third-party funds, trading and administration costs. If anything is unclear, don’t be afraid to ask further questions.
What level of service can you expect?
Service and communication are undoubtedly important throughout your relationship with your wealth manager, for example, you may want access to the same person managing your portfolio, require an annual tax package, want to receive regular investment valuation reports and understand what other services the wealth manager can offer as part of the overall offering.
Points for consideration
As the meeting draws to a close, feel free to ask as many questions as you need.
You can also ask the portfolio manager to send a summary of what was discussed. That way you can refer back to the notes and give them further thought, as you decide on the right wealth manager for you.
The Cazenove Capital Management way…
At Cazenove Capital we aim to make the process of selecting a wealth manager as easy as possible. To help you to think about your financial goals, we find it useful for one of our wealth planners to attend the meeting alongside the portfolio manager. If you already have an adviser, we are happy to work alongside them too.
Wealth planners help to understand the bigger picture when it comes to your financial situation and objectives before the portfolio manager considers which investments are suitable for your personal requirements. For example, we want to make sure that we use your annual tax allowances to the full.
We consider this a very important part of getting to know you and for the portfolio manager to understand your level of financial knowledge and your attitude to risk.
Whilst capital preservation may be the main aim, we can never rule out risks to your capital as markets are unpredictable.
In the meeting we will explain how our investment process works, the depth of our resources, and potentially show you examples of existing portfolios and how they have performed. This helps to give you a better idea about the types of returns you can expect, based on the amount of risk you are willing to take.
We will also explore whether you prefer investing directly in company shares and bonds rather than funds. Likewise, do you have any specific ethical considerations? All of these points can be factored into the way we construct your portfolio.
At Cazenove Capital, we aim to be as transparent as possible. We will have an open discussion about fees and charges during your initial meetings and we are more than happy to explain aspects in greater detail and to demonstrate how we have performed with similar portfolios after fees.
Your portfolio manager will also want to know your preference for the frequency and delivery of communications.
We offer up-to-date valuations via our online client portal and regular reporting tailored to your preferences. In addition, we also send our clients our quarterly publication, produce investment articles, host investment seminars and other client events.
The first meeting marks the start of a relationship and no-one expects you to hand over responsibility for your wealth in the space of an hour. In our experience we recognise that it can take a number of meetings to establish the solid foundations of a relationship, built on trust, which we hope will span many years.
We encourage regular dialogue with our clients, and are happy to meet as often as suits you. We recommend at least once a year; however outside of these meetings we are also available at the other end of the phone or an email whenever you need us.
If you would like to talk to one of our team about how we can help you, please call Mary-Anne Daly on
020 7658 1300 or email firstname.lastname@example.org.
This article is issued by Cazenove Capital which is part of the Schroder Group and a trading name of Schroder & Co. Limited, 12 Moorgate, London, EC2R 6DA. Authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority.
Nothing in this document should be deemed to constitute the provision of financial, investment or other professional advice in any way. Past performance is not a guide to future performance. The value of an investment and the income from it may go down as well as up and investors may not get back the amount originally invested.
This document may include forward-looking statements that are based upon our current opinions, expectations and projections. We undertake no obligation to update or revise any forward-looking statements. Actual results could differ materially from those anticipated in the forward-looking statements.
All data contained within this document is sourced from Cazenove Capital unless otherwise stated.