How to evaluate a financial firm?
February 15, 2010 2:45 PM Subscribe
How can I evaluate objectively a wealth management firm/financial independent advisors firm?
I have been recently being approached by a "independent" financial advisor. Obviously, his "value-add" is the actual help with the planning, and advice, but he is also representing a wealth management firm.
Question here is:
How can I do an objective evaluation of this independent financial firm, and also about the wealth management firm?
If this was a book, I would just to go amazon to read the reviews. Does
such a site exist for things like this?
I had never been exposed before to an "offshore wealth mgmt" firm, based I think in Guernsey. This is some kind of tax haven for international clients (i.e. non-british citizens).
The company name is Generali International. My google-fu does not
lead me to any site with information about the company's reputation, as given by real people....
I have been recently being approached by a "independent" financial advisor. Obviously, his "value-add" is the actual help with the planning, and advice, but he is also representing a wealth management firm.
Question here is:
How can I do an objective evaluation of this independent financial firm, and also about the wealth management firm?
If this was a book, I would just to go amazon to read the reviews. Does
such a site exist for things like this?
I had never been exposed before to an "offshore wealth mgmt" firm, based I think in Guernsey. This is some kind of tax haven for international clients (i.e. non-british citizens).
The company name is Generali International. My google-fu does not
lead me to any site with information about the company's reputation, as given by real people....
If the advisor approached you without a reference, I would stay away. Cold calls from financial advisors are often bad news. Particularly if they are selling some sort of international tax haven. There's outright fraud and then also a world of shady advisors who screw their clients.
You won't find consumer ratings for financial advisors; the rich people who are their clients value their privacy. Instead, most people seem to find an advisor via word of mouth, references, and interviews. If the advisor were American, some simple due diligence you can do would be to read their Form ADV, both parts 1 and 2. It discloses the basic structure of the business as well as any serious bad history. I don't know how to evaluate international firms. Their website lists financial ratings from all the big rating agencies, so you could start there, but that won't tell you much about the advisory business itself.
Beyond that you interview the people, see if you like communicating with them, and ask detailed questions about their compensation structure and conflicts of interest. Finally you check references. If you need a financial advisor you should be interviewing several at the same time.
posted by Nelson at 3:42 PM on February 15, 2010
You won't find consumer ratings for financial advisors; the rich people who are their clients value their privacy. Instead, most people seem to find an advisor via word of mouth, references, and interviews. If the advisor were American, some simple due diligence you can do would be to read their Form ADV, both parts 1 and 2. It discloses the basic structure of the business as well as any serious bad history. I don't know how to evaluate international firms. Their website lists financial ratings from all the big rating agencies, so you could start there, but that won't tell you much about the advisory business itself.
Beyond that you interview the people, see if you like communicating with them, and ask detailed questions about their compensation structure and conflicts of interest. Finally you check references. If you need a financial advisor you should be interviewing several at the same time.
posted by Nelson at 3:42 PM on February 15, 2010
Response by poster: Hey, thanks for the link.
I searched for them, and they are indeed registered there.
Maybe a bit naive, but to what extent does registration guarantee their trustworthiness?
posted by theKik at 3:42 PM on February 15, 2010
I searched for them, and they are indeed registered there.
Maybe a bit naive, but to what extent does registration guarantee their trustworthiness?
posted by theKik at 3:42 PM on February 15, 2010
Maybe a bit naive, but to what extent does registration guarantee their trustworthiness?
Unfortunately, I'm not qualified to answer that question. I don't really know anything about Guernsey or its regulatory structure. I only know that it is an offshore tax haven; its status as a tax haven doesn't really tell me anything about this particular company, though.
posted by dfriedman at 3:53 PM on February 15, 2010
Unfortunately, I'm not qualified to answer that question. I don't really know anything about Guernsey or its regulatory structure. I only know that it is an offshore tax haven; its status as a tax haven doesn't really tell me anything about this particular company, though.
posted by dfriedman at 3:53 PM on February 15, 2010
Do you have enough wealth for this to actually be worthwhile after the assuredly humungous fees?
Most people who have a lot of money don't need financial advisors, they already know how to manage their money. Hell, I'm not even wealthy and I know how to manage my own money, and that's just with self education with books and other reading.
posted by mallow005 at 4:38 PM on February 15, 2010
Most people who have a lot of money don't need financial advisors, they already know how to manage their money. Hell, I'm not even wealthy and I know how to manage my own money, and that's just with self education with books and other reading.
posted by mallow005 at 4:38 PM on February 15, 2010
Response by poster: @mallow005:
Heh... yeah I wish I was that wealthy...no, my question was actually more geared
towards trusting an offshore company. What they are offering me is a plan in which you contribute monthly over a time period, typically used towards securing your kids's university education, which is what I am interested in.
@Nelson: thanks for the sound advice.
posted by theKik at 8:47 PM on February 15, 2010
Heh... yeah I wish I was that wealthy...no, my question was actually more geared
towards trusting an offshore company. What they are offering me is a plan in which you contribute monthly over a time period, typically used towards securing your kids's university education, which is what I am interested in.
@Nelson: thanks for the sound advice.
posted by theKik at 8:47 PM on February 15, 2010
What they are offering me is a plan in which you contribute monthly over a time period, typically used towards securing your kids's university education, which is what I am interested in.
This sounds like a scam to me. Or at best, a poor investment. You really don't want to buy an investment product based on a cold call from the broker.
If you're in the US, a simple 529 plan offers a tax-advantaged way of saving for education.
posted by Nelson at 6:54 AM on February 16, 2010
This sounds like a scam to me. Or at best, a poor investment. You really don't want to buy an investment product based on a cold call from the broker.
If you're in the US, a simple 529 plan offers a tax-advantaged way of saving for education.
posted by Nelson at 6:54 AM on February 16, 2010
It would be helpful if you could say which country you're in. If you're in the UK, I could steer you towards some helpful resources that would help you to make a more informed decision, but regulation will differ from country to country.
That said, I work with a lot of perfectly legitimate offshore investment companies, but again, no one could really even speculate much on this unless we know where you are.
posted by triggerfinger at 12:55 PM on February 16, 2010
That said, I work with a lot of perfectly legitimate offshore investment companies, but again, no one could really even speculate much on this unless we know where you are.
posted by triggerfinger at 12:55 PM on February 16, 2010
This thread is closed to new comments.
Perhaps that organization has the information you are looking for.
posted by dfriedman at 3:16 PM on February 15, 2010