Abstract
The authors discuss how executives and entrepreneurs can work with advisors to optimize their financial plans. They suggest key questions to ask and consider when seeking out professional assistance, such as: what financial advisory services do you offer; are you a fiduciary; how do you get compensated for the advice you recommend; what professional credentials do you hold; where and how will you custody my assets; whom will I be interacting with in addition to you; what is your investment philosophy; how are investment decisions made; what are the types of clients you work with most often; how often should I expect to hear from you; and what is your succession solution should something unforeseen happen to you?
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Notes
- 1.
In “The Affluent Investor” study by The Spectrem Group (2016), an ultra-high-net-worth individual is placed at $5–25 million, not including primary residence, and millionaires at $1–5 million, not including primary residence. Spectrem Group. Used with permission.
- 2.
See Reichheld, “The One Number You Need to Grow,” Harvard Business Review (December 2003).
- 3.
“Creating Advisor Advocates to Help Boost Referrals,” The 2016 Fidelity® Millionaire Outlook Study. © 2018 FMR LLC. All rights reserved. Used with permission.
- 4.
See “Sink or Swim: Why Wealth Management Can’t Afford to Miss the Digital Wave,” PricewaterhouseCoopers LLP, 2016, https://www.pwc.com/sg/en/publications/wealth-20.html (survey of more than 1000 individuals in Europe, North America, and Asia).
- 5.
See “The Affluent Investor,” Spectrem Group, published 2016, https://spectrem.com/Content_Product/mass-affluent-series-2016.aspx.
- 6.
See “The 2016 Millionaire Outlook Study,” Fidelity, published 2016, https://clearingcustody.fidelity.com/app/literature/item/9870983.html?sapl=go.
- 7.
See “The 2016 Millionaire Outlook Study,” Fidelity, published 2016, https://clearingcustody.fidelity.com/app/literature/item/9870983.html?sapl=go.
- 8.
We note that, as of the writing of this book, the SEC has proposed a new “best interest” standard under which broker-dealers and others associated with broker-dealers would be required “to act in the best interest” of retail customers “at the time a recommendation is made without placing the financial or other interest of the broker-dealer … ahead of the interest of the retail customer.” See SEC Release No. 34-83,062 (April 18, 2018). The proposal offers little guidance as to the exact parameters of this standard, but it is seen by some as potentially more rigorous than the suitability standard and less rigorous than the fiduciary standard.
- 9.
Examples include Fidelity Investments, Pershing, Charles Schwab, and TD Ameritrade.
- 10.
Emily Zulz, “Higher Fees Won’t Spook Most Advisory Clients: SEI,” Think Advisor, published February 4, 2016, https://www.thinkadvisor.com/2016/02/04/higher-fees-wont-spook-most-advisory-clients-sei/?slreturn=20180505093857.
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Nathanson, M.J. et al. (2018). Finding the Right Advisors. In: Personal Financial Planning for Executives and Entrepreneurs. Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-319-98416-2_12
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DOI: https://doi.org/10.1007/978-3-319-98416-2_12
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