The right partner can help you preserve and build wealth, as well as successfully transfer that wealth to the next generation. However, once you select an adviser, how do you develop a long-term working relationship that is the most beneficial for you?
When establishing a relationship, the adviser should take the time to get to know you and your financial situation, your financial goals and your risk tolerance. However, the amount of personal attention expected as the relationship moves forward frequently is different for different people.
The key to a successful relationship is to establish a clear, mutual understanding about what you want and expect from each other. For the long-term benefit of the professional relationship, discuss your expectations early in the process.
The relationship must be a shared effort between adviser and client. The cornerstone of a successful relationship involves both of you participating in the decision-making process. Setting expectations at the beginning can avoid misunderstandings or dissatisfaction later.
Issues to discuss with your adviser should include:
* Account management. The process of assessing your financial situation, risk tolerance and opportunities is continuous. However, preferences vary widely regarding the degree to which an individual wants to be involved.
Agree on how your plan will be monitored and evaluated to ensure it is helping you progress toward your goals. And clarify how you want to discuss financial questions and possible investment opportunities, including assessing the risk and reward potential of those investments.
* Frequency of communication. Discuss with your adviser how frequently you expect to communicate with him or her regarding your financial situation, your portfolio and its performance. Determine the process for making adjustments to ensure your plan continues to meet your situation and goals. Update your adviser when your financial needs or situation changes. A change in life circumstances, such as the sale of a business, retirement or the birth of a child or grandchild may necessitate an adjustment to your financial plan.
* Preferred form of communication. Discuss your preference for a primary method of communication, whether by telephone, e-mail, fax, in-person meetings or some combination of these.
* Working with other professionals. Most people expect an adviser to provide expert advice about investments, retirement planning and insurance. However, you may also ask your adviser to work with other professionals, including your attorney, accountant, insurance agent or investment fund sales representative. By making your financial adviser a partner with your other counselors, you help ensure the services you receive from each will work in tandem to reach your overall plans and goals.
* Business changes. Clarify with your adviser how he or she will keep you informed of professional issues related to your relationship. Your adviser may have gained new expertise or received a new professional designation. His or her office may have implemented changes in processes, staffing or fee structure. Be confident that your adviser will inform you of changes that may modify your relationship or require you to make decisions regarding your account.
* Protecting client confidentiality and data integrity. Discuss the controls your adviser has in place to protect you. The information shared between you and your adviser should be held in strict confidence according to the law and in keeping with professional trust and ethical behavior.
* Documentation. Your adviser may provide a number of documents, including reports of daily trade activities, monthly statements and quarterly investment reviews. The amount and frequency of information provided by an adviser and expected by an individual can vary widely, so clarify your expectations.
Taking a disciplined approach to managing your relationship with your adviser is of great value. Not only can it help ensure you are informed and consistent with regard to your finances, it can also improve your financial future.
The most successful partnership is one in which you build mutual trust and understanding, and then work together to ensure that your financial adviser has the information needed to act effectively to achieve your long-term financial goals.
Calloway Robertson is a vice president and wealth management adviser for Fifth Third Bank Investment Advisers located at 21 E. State St., Columbus, and can be reached directly at (614) 744-5429 or by e-mail at Calloway.Robertson@53.com.