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  • Writer's pictureShernel Thielman

Selecting an asset manager or advisor is an important life decision

According to a 2022 study by Northwestern Mutual, 62% of adults in the United States admit that their financial management needs improvement. However, only 35% of Americans work with a wealth manager or investment advisor. The value of working with a wealth manager or advisor varies for each individual. While investment managers and advisors are not legally authorized to guarantee returns, research suggests that people who work with them feel more comfortable about their financial situation and may have approximately 15% more money available to spend during retirement. For example, a 2019 study by Vanguard found that a hypothetical investment of $500,000 would grow to an average of over $3.4 million under the management of a wealth manager over a 25-year period. In comparison, the expected value of a self-managed portfolio would be $1.69 million, which is 50% less. In other words, a portfolio managed by a wealth manager is expected to show an average annual growth of 8% over a 25-year period, as opposed to 5% with a self-managed portfolio. While working with a wealth manager incurs costs, the potential returns and peace of mind it brings can justify the investment. In addition to considering working with a wealth manager, it is also important to explore the benefits of working with an independent wealth manager. Here are some key reasons why collaborating with an independent wealth manager can be advantageous:

  1. Objectivity and independence: Independent wealth managers have no hidden agendas or conflicts of interest. They work in the best interest of their clients and are free from any pressure to promote specific products or services. This allows them to provide impartial advice and develop customized investment strategies that align with their clients' specific needs and goals.

  2. Access to a wide range of investment opportunities: Independent wealth managers often have an extensive selection of investment opportunities at their disposal. They can draw from diverse markets, sectors, and investment instruments to build well-diversified portfolios that match their clients' risk profiles and objectives. This broad access to investment opportunities can help optimize returns and reduce risks.

  3. Personal attention and customization: Independent wealth managers strive to build a personal relationship with their clients. They understand that each client has unique financial goals and circumstances. By working closely and gaining a deep understanding of their clients' needs and objectives, independent wealth managers can develop tailored investment plans and provide ongoing support. This personal attention contributes to a better understanding of the client and ensures close alignment of the investment strategy with individual needs.

  4. Support and expertise: Independent wealth managers possess extensive knowledge and expertise in the field of investing. They continuously monitor market developments, analyze trends, and assess investment opportunities. This enables them to provide their clients with expert advice and guide them in making informed decisions. Additionally, independent wealth managers often offer comprehensive reporting and monitoring tools, allowing clients to stay informed about the performance of their portfolio.

It is never too early or too late to work with a wealth manager. Whether you are early in your career or approaching retirement, seeking professional advice in managing your wealth can be rewarding. Ultimately, having an expert by your side can help you achieve your financial goals and lay a solid foundation for a secure future.

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