Before constructing a financial plan you need to choose a wealth manager. This choice may be subjective as a crucial part of the decision is the chemistry between you and your wealth manager.

You have to be able to trust the wealth manager. This trust will be gained in a number of ways. First, it is through the qualifications and the level of experience of the wealth manager.  It is important the wealth manager you choose is qualified to provide you with the necessary advice to the highest standard possible.

Second, you may receive reassurance if a wealth manager is recommended by a member of your family or by a friend, although this is not a guarantee of success.

The way in which wealth managers work varies so you need to understand more about them before making a final choice. The differentials include:

1) The level of service required

When wealth managers talk about providing a personal service, this means different things to different people. Try to establish the level of service a wealth manager will provide, how frequently they will review your financial plan and how many meetings will be face-to-face rather than online or over the telephone. Check they will provide you with a comprehensive wealth management service and not simply try to sell you financial products. Establish the systems and processes the wealth manager will use and whether they will implement the recommendations themselves. Ask about the level and frequency of reports and information you will be provided with by the wealth manager. This is important to you understanding the progress you are making in achieving your objectives and whether you need to review your financial plan.

2) Check the qualifications of the wealth manager before you start

Ensure they are sufficiently qualified and experienced to advise you on achieving your financial plan. Ask what was involved in the wealth manager gaining these qualifications. Obviously, the more complex your structuring requirements, the greater the qualifications your wealth manager will need. Check the resources available within the wealth management firm. See if they have experts in different areas, such as pensions, investment and tax planning. No one individual is an expert in all areas of wealth management. Ask them which other wealth managers they will consult for certain parts of your financial affairs.

3) See if you can ask other clients of the wealth manager to verify the service they have been provided

Even if a wealth manager is recommended, it is advisable to go through all the other steps to check they are appropriate for your requirements.

4) Check the longevity of advisers at the wealth manager

An adviser will gain a knowledge of not only your financial objectives and wealth but also your risk profile over time. They will achieve an insight that is not possible simply by reading a file of notes on your financial affairs. If your adviser changes every year, the new manager will have to build this insight virtually from scratch. The stability of advisers and other employees at the wealth manager will provide an indication of the character of the institution. Some IFAs and private banks, for example, have suffered from many advisers and private bankers leaving on a frequent basis.
 
5) The range of products and services offered

Does the wealth manager have access to all products from all providers in the market and therefore is truly independent? Does the wealth manager have a bias to a few providers or is he restricted even to one provider?

6) Is the wealth manager one-stop shop wealth manager or does it use a group of specialists?

Some wealth managers have tried to build in-house specialisations in all areas of wealth management, including tax planning, investments and estate planning. There is no one right approach. While some people prefer just to deal with one wealth manager they trust, others would rather use specialists from different wealth managers so they do not have all their eggs in one basket. If a wealth manager is part of an institution that provides products, such as investment funds, ensure there will be no potential bias to this provider and therefore a possible conflict of interest.

7) Review the size and financial strength of the wealth manager

This is a subjective choice as there are advantages and disadvantages in using boutique wealth managers or large institutions. Among these is the perceived comfort a large institution can provide in terms of financial strength and depth of expertise. While boutique wealth managers may not have the financial strengths of global private banks, however, personal service may be higher. Whichever you choose, the most important factor is whether the service meets your requirements.

8) Check that the individual wealth manager you meet will act as your adviser

If this is not the case then ask to have a meeting with your prospective wealth manager before agreeing to use the institution.

9) Before you select a wealth manager, establish their charges and check how these will be levied

If the wealth manager charges fees, establish what these are. Is this on an hourly basis and which activities are chargeable? Is it every conversation, measurable advice or transactions? You may be given a choice over how you pay for the wealth manager. This should be documented before the wealth manager starts providing advice. Charges will vary from one wealth manager to another. This will depend on the size of the institution, the seniority, qualifications and experience of the wealth manager, the level of service they provide, their location and your requirements. London-based wealth managers generally charge more than those based elsewhere in the UK. Many wealth managers will provide an initial interview for no charge. This meeting will be used to determine if you want to appoint the wealth manager and whether he can assist you in achieving your objectives.

10) What is the wealth manager’s international expertise

Children frequently study and work abroad or marry foreign nationalities. Millions now also buy properties overseas. These give rise to tax planning and structuring issues. It is therefore important to ensure that your wealth manager has the expertise to handle overseas planning or has associations with professionals who can deal with these issues and have knowledge of tax regimes around the world.

11) You must trust the wealth manager you choose

Trust is an instinctive evaluation and will become apparent as you talk to the wealth manager. Check with the regulator (www.fsa.gov.uk) that the wealth manager or his firm has ever been disciplined or fined in the past. Even if you trust the wealth manager completely, it is still essential to receive written confirmation of any agreements you make, such as the services you will be provided and how much this will cost.

Once you have chosen a wealth manager, there are six core steps that will comprise the wealth management process. These are:

• Identify goals and objectives.
• Collect and analyse personal and financial information. This includes evaluating your attitude to risk.
• Processing and analysing the information.
• Producing the financial plan based on this information.
• Implementing the plan.
• Reviewing the progress of the plan and making alterations.

These six steps will be analysed in detail in chapter three of the book.