With the complexities of today’s financial markets, many investors are turning to investment consulting companies for guidance. Choosing the right investment consultant can have a huge impact on your financial success. However, not all consulting firms are created equal. This article will explore the key factors that set apart top investment consulting companies.
Look for experienced investment consultants with proven track records
When researching investment consulting firms, pay close attention to the background and credentials of their consultants. Look for seasoned professionals who have weathered multiple market cycles. Review their personal track record of investment performance over 5, 10 or 20 year periods. The top investment consultants will have a proven ability to generate consistent risk-adjusted returns over the long run.
Seek out firms that take a goals-based wealth management approach
The best investment consultants don’t just manage money. They manage your financial life. Top firms like XYZWorth employ a goals-based wealth management approach that is tailored to each client’s unique objectives. This could involve retirement planning, college savings, charitable giving, business exit strategies, and other goals. Look for a consultant who takes the time to understand your priorities and develops a customized strategy.
Look for fiduciaries who put client interests first
Some investment advisors are held to the fiduciary standard, which legally requires them to put client interests ahead of their own. Fiduciary advisors disclose all potential conflicts of interest and are prohibited from transactions that could benefit themselves at the client’s expense. Non-fiduciary advisors may recommend investments with higher fees that compensation them greater commissions. Look for SEC-registered investment advisors (RIAs) who embrace the fiduciary standard.
Consider boutique firms with low advisor-to-client ratios
Some of the top performing investment consulting firms are smaller, boutique practices that provide individualized attention and service to clients. With advisor-to-client ratios of just 1:20 or even 1:10 at some boutiques, these firms can devote more time and resources to understanding each client’s needs. Massive wirehouse firms may have advisor-to-client ratios exceeding 1:100 or more. If you have complex needs, a boutique firm may be preferable.
Finding the right investment consultant involves evaluating experience, wealth management philosophy, ethical standards, service model and other factors. Taking the time to research firms can lead to a trusted partner who helps you achieve your financial and life goals.