More education from Charles Schwab on RIAs.
1) Get advice based on what’s best for you.
Whether it’s your retirement planning, tax situation, estate planning or assets at multiple places, it’s fundamentally important that your advisor truly understand you, your goals and your situation. Many independent registered investment advisors (RIAs) are in a position to do that and pride themselves on strong personal interaction with their clients and dedication to their needs. They believe that their independence is key to offering investment advice based on what’s best for their clients.
2) Understand exactly what you’re paying for.
Independent RIAs typically charge a fee based on a percentage of total assets managed. This fee structure may have advantages. It’s simple and easy to understand, helping to avoid surprises. It also gives your advisor an incentive to grow your assets—when you succeed, your advisor succeeds.
3) Get advice for your complex needs.
Many independent RIAs provide services that address a variety of complex investment needs that often arise when you accumulate significant wealth, such as assisting you with the sale of a business, complicated tax situations, trusts and intergenerational issues. Some advisors are specialists in certain investment strategies. Others can assist you with comprehensive services, such as estate planning or borrowing. Given the rich diversity of specialization throughout the industry, no matter how complex your individual needs, you will likely find an independent RIA who can provide advice that’s right for you.
4) Enjoy a different kind of relationship.
The goal of an RIA is to help find solutions that are closely aligned with client needs and objectives, and many independent RIAs enjoy a deep, personal relationship with their clients. This often takes regular, ongoing interactions. And because many independent RIAs are entrepreneurial business owners, the buck stops with them, so to speak, and they frequently have a strong sense of personal accountability to their clients.
5) Know where your money is held.
RIAs typically use institutional custodians—generally large brokerage firms or banks—to hold and safeguard their clients’ stocks, mutual funds and other assets. These custodians also provide important infrastructure services such as executing trades and preparing monthly brokerage statements for clients. This helps an RIA focus on understanding your needs and providing the best advice possible.
Arie J. Korving, a CERTIFIED FINANCIAL PLANNER™ professional, has been delivering customized wealth management solutions to his clients for more than three decades. Prior to co-founding Korving & Company, he was First Vice President with UBS Wealth Management and held management positions with General Electric.