Building a strong wealth management team

January 07, 2023
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Q: When I retired, I decided that managing my retirement portfolio was going to be my full-time job. After the bruising I took in the markets last year, I have changed my mind. Do you have any thoughts on what kind of a team I should assemble to help me protect my nest egg?

A: Managing personal wealth can be a daunting task. The greater your wealth, the more complex the challenge. In addition to a sound understanding of basic financial principles, wealth management requires in-depth expertise in tax planning, estate planning and investment management. Since each of these fields is highly technical, most people are unable to master them all. Instead, you would do well to surround yourself with a team of professionals who can help you carry the load.

The core of your professional team should include a financial advisor, a tax professional and an estate-planning attorney. Because you will need to rely on this team, look for team members who have excellent technical expertise, strong reputations, and good communication skills. Wealth management is a big job and it pays to take the time needed to get the right people. The following ideas should help build a strong and capable team.

Your financial advisor is typically the quarterback of your wealth management team and should have extensive experience, proper credentials, and should be a legal fiduciary. A number of certifications exist, but the most relevant and widely recognized credential for wealth management is the Certified Financial Planner® or CFP® designation. CFP® professionals have a broad knowledge of personal finance and have demonstrated their mastery by passing a rigorous exam and working at least three years in the financial planning industry. Continuing education helps the CFP® professional stay current.

Make sure your team members are legal fiduciaries. A fiduciary is obligated to put your interests first. Your attorney and CPA are fiduciaries, but you cannot always assume that about financial advisors. You can tell if a financial advisor is a fiduciary by asking a simple question: How does the advisor or the advisor’s firm get paid? Do they have an incentive to sell something? Do they earn commissions, participate in revenue sharing, or receive referral fees? If they receive payment from any source other than you as their client, they have a conflict of interest and are not a true fiduciary.

If you choose to work with an advisor who is a fiduciary, the National Association of Personal Financial Advisors is an organization of fee-only financial advisors. Their website (www.NAPFA.org) is a great resource to find advisors who are true fiduciaries.

When considering an estate-planning attorney, look for someone with certified estate planning expertise. The California State Bar Association has a program to certify legal specialists in several areas, including estate planning, trusts and probate. To qualify as an estate planning specialist, an attorney needs to pass a certifying exam, complete at least 45 hours of estate planning continuing education and work in the estate planning field for a sufficient amount of time. The California State Bar keeps a list of attorneys by specialty in each county. We are fortunate in Monterey County to have several excellent estate planning attorneys. You can find a listing of specialists at the Bar Association’s legal specialization website: ls.calbar.ca.gov.

Some CPAs and all EAs (Enrolled Agents) are tax professionals. The best way to find the tax professional you need is to network with other professionals. Ask them for recommendations. As you work with your financial advisor and attorney, it will become apparent what expertise you need from your tax professional.

Other professionals can also be a great help when it comes to managing your wealth. For example, a strong insurance agent can help you figure out how to offset some of the financial risks you face. You might also benefit from developing a good relationship with a mortgage banker. Your financial advisor should be able to help you identify qualified professionals as the need arises.


Please see important disclosure information here.  


Steven C. Merrell  MBA, CFP®, AIF® is a Partner at Monterey Private Wealth, Inc., a Wealth Management Firm in Monterey.   He welcomes questions that you may have concerning investments, taxes, retirement, or estate planning.  Send your questions to: Steve Merrell, 2340 Garden Road Suite 202, Monterey, CA  93940 or email them to smerrell@montereypw.com.