Diversified Wealth Management Solutions
7498 N Remington Ave, Suite 103
Fresno, CA 93711
Phone: (559) 412-8492

About Us | Choose the Right Advisor

In the complex world of finance and investment, there are many companies that provide wealth management solutions to prospective clients. Many of them claim to have competent financial professionals working for them who can help you to achieve your financial goals. You have to keep in mind, though, that not all of them have your best interests at heart, and not all of them are able to deliver on their promises of providing you with sound investment options. That is why you have to know the things to look out for when choosing investment advisors so that you can make an informed decision on who to use as your financial advisor. Diversified Wealth Management Solutions has the requisite team and resources that make it possible for you to truly reap the benefits of your investments, backed by credible information and sound wealth management advice that will put you on the path to financial freedom in your later years. While it may seem that we are putting ourselves above all other firms who operate in our industry, we invite you to consider the following information that will help you to assess whether or not we deserve to be your wealth management advisors:

Experience and Background

When selecting an investment advisor, you need to dig deep into their experience and background as it relates to offering financial advice. After all, it is your money and financial future that is at stake. It is always recommended to check out the disciplinary history of those advisors you are considering. You can access an advisor’s public records on the Securities and Exchange Commission’s website at http://adviserinfo.sec.gov. In addition, try to find individuals in situations similar to yours who have used their products and services so that you can get a feel of the experience they have had with the investment firm. Firms that have professional designations like CFA, MFS, and CFP are committed to ethical practices and are knowledgeable about investment solutions.

There are a few questions that you can pose to your prospective advisor so as to get a feel of his or her experience and background. For example, you may ask:

  • What is your financial and investment planning experience?

  • What is your educational background?

  • What are your professional designations and affiliations?

  • What type of client do you generally cater to?

  • How many clients do you work with personally?

  • What other businesses, if any, are you currently engaged in?

  • Have you ever been disciplined in any way by a regulatory body?

  • Are there any other professionals in your field who can vouch for your credibility?

  • Are there any clients who could speak to your effectiveness as an investment advisor?

There are really no right or wrong answers to those questions. As such, based on how well you feel the advisor answered them, in your judgement, you can decide whether or not to let that individual become your financial planner.

Payment of Fees or Commissions

Advisors are compensated in different ways. Let’s start with the fee based compensation model. In this model advisors are compensated based on their advice not the product sold. This fee is charged directly to the client and can be charged at a fixed rate, hourly rate or as a percentage of the overall portfolio. You should ask the advisor how he is compensated and/or you can also review the firms ADV part 2A to see how the firm’s management fee is charged.

In the commission based model, advisors are compensated by the investment company in the form of a commission. It can somewhat be thought of as a finder’s fee, by the investment firm to the advisor for placing the client in a particular investment. These commissions can vary in size and can often create a conflict of interest for the advisor when deciding between multiple investments with varying commissions. When purchasing an investment from a commission based advisor it is also important to ask him/her how they are paid.

In today’s market place there are three types of advisors. You will find advisors that are fee only and that offer no commission based products, those that are commission based with no fee based options and those that are hybrid advisors(able to offer both fee based and commission based options). It is important to understand how your advisor operates and why he/she has chosen to operate their business in that way. In order to calm your nerves, so to speak, about how a potential advisor is compensated, you may ask him or her questions like:

  • How are you compensated for the work that you do, and how is it calculated?

  • Does anyone else in your firm or elsewhere receive compensation from investments that you make or recommend?

  • Do you receive residual income from investments that you recommend?

  • Do you receive kickbacks for recommending certain products to me?

  • Is there a legal document that I can peruse describing your compensation and the services that you provide ahead of me signing the investment agreement?

Accessibility and Service

World class advisors have a top notch service model and are always accessible to you. They understand that your finances are important to you and that concerns or issues can come up at inopportune times. Consider a late night appointment with your CPA or Attorney and a question comes up that needs clarification from your investment advisor. Can you reach him/her? Regardless if they are able to give you the answer on the spot, we believe that you should be able to have the conversation and know when to expect an answer.

We recommend that you choose an advisor with a strong service model. You deserve to hear from your advisor on a regular and consistent bases. In some cases even a good service model can lack follow through. We recommend that you let your advisor know if his/her actions are not matching your expectations. If things do not improve, you may want to consider looking for another advisor. Often, advisors have chosen to take on more clients than they can effectively service. Here are some questions that you can ask that may shed some light on how you will be taken care of:

  • What is your service model?

  • How often will you contact me with updates?

  • Are you available after hours?

  • Do you give out your personal cell phone number?

  • When I call in for questions, will I talk to you directly?/

  • How many clients do you have?

  • If you are unavailable, how long should I expect to wait to hear back from you?

Potential Client Interview

Reputable financial advisors always hold face-to-face, no-cost interviews with potential clients. In this meeting, clients are allowed to ask as many questions as they see fit so that they can attain a certain level of comfort and comradery with the advisor. If you do not deem the advisor as being trustworthy or are uncomfortable with the advisor who is conducting your interview, try to find a new advisor that you feel comfortable with seeing that you will have to share information about your personal life and finances with that individual. Being open and truthful will go a long way in aiding the advisor to properly tailor the investment options that are suitable for your financial future.
During the interview, here are some questions that you could ask the wealth advisor:

  • Does your advice cover all possible areas of financial planning?

  • Do you make recommendations regarding investments that would be suitable for my portfolio?

  • Do you offer on-going advisory services after the investment agreement has been signed?

  • Would you have access to my assets once the necessary investments have been made?

  • Could you please relate to me your investment philosophy?

  • Is there a sample portfolio that you can show to me?

You can think of other pertinent questions to ask the advisor based on what you feel you need to know. Do not be afraid to ask them. If the advisor is hesitant or keeps getting stumped when you ask him or her questions that he or she should obviously know the answers to, move on to a different advisor.

Investment Philosophy

Each advisor has their own ways of investing money. Many are successful at it while others are not. You may find at times that some advisors boast about how great their investment strategies are and how they are always able to get the best of the market. While there is nothing wrong with boasting about one’s performance, it would be wise not to rush and invest with the first advisor who behaves in such a manner. Since it is your money and your financial future at stake, you must still seek out an advisor who has the ability to properly carve out an investment plan for you, one that is custom fit for your needs. If the investment philosophy of one advisor does not appeal to you, move on to another one until you find the one that suits you best.