How to Select an Advisor
Providing You the Key Questions You Should Ask – and Our HB Wealth Answers
How to Select an Advisor
Providing You the Key Questions You Should Ask – and Our HB Answers
Thinking about hiring HB or another firm as your financial advisor? We encourage you to review this list of questions and answers as you think about your choices.
Care
HB Wealth operates under the fiduciary standard, meaning that we must put your interests first, period. HB Wealth was founded as a Fee-Only Fiduciary firm in 1989 and we have never changed our view – we believe in our approach, and our clients value the peace of mind that comes from knowing that our transparent client service model puts us on the same side of the table working together for their best interests.
At HB Wealth you will typically have 3-4 people on your client service team, and the culture of our firm is for the entire firm to serve you as a client. Some firms with sales oriented cultures do not really share ideas between teams and may be financially motivated not to get more people involved in serving you as a client. That is not our approach – we believe in a team approach.
Personal fit is important to us and we try to align our new clients with the best potential fit for their personality and needs among our HB Wealth team members. We feel our 98% retention (please see disclosures to understand how we calculate client retention) rate speaks to the success of our focus on service and fit.
Client-Aligned
HB Wealth is fee-only, not fee-based. We are only paid by our clients. Most clients pay a fee calculated as a percentage of the assets we manage. Some firms charge fees in a similar way…but then also collect commissions, mutual fund fees, incentive fees, or other side payments from other business services, leading them to call themselves “fee-based.” Some brokerage firms will try to tell you that their service “is not as expensive as those independent firms where you have to pay a fee” but they do not tell you that can often end up paying even more in commissions and mutual fund fees and hidden incentive payments – but you may not see that number anywhere on your monthly statements.
Some firms sell insurance, mortgages, accounting services, or estate planning legal services. HB Wealth does none of the above. We believe this makes it easier for us to be your fiduciary advisor across all parts of your financial life.
This is a critical question that should always be asked. Most independent firms like HB Wealth will use a third party custodian like Charles Schwab or Fidelity. This provides you as the client an independent way to verify your assets outside of reports from your advisor.
Registered investment advisers (RIAs) like HB Wealth must file a Form ADV with the SEC each year. You can search for the ADV of an advisor at www.adviserinfo.sec.gov. Form ADV Part 1 online describes the firm’s services, how many financial assets they manage, their compensation, disciplinary history, and other operations details. Form ADV Part 2A is what the advisor is required to give you as a prospect (we include one in every set of brochure materials for a potential new client meeting). Part 2A provides more information about the services, investment strategies, fees, and potential conflicts for the firm.
Credentials
In our view the two most critical certifications are the CERTIFIED FINANCIAL PLANNER® certification and Chartered Financial Analyst® certification. CFP® certificants have completed university level financial planning courses and have passed a lengthy exam covering over 80 planning-related topics. You can learn more at www.cfp.net. CFA® charterholders must pass three separate full day exams focused on a wide range of investment related topics, each of which demands a minimum of 250 hours of study per the CFA Institute. Learn more at www.cfainstitute.org. We also have many Certified Public Accountants (CPA®) on our staff who bring the rigor and focus of their background to their client work.
Comprehensiveness
Some firms focus mostly on planning as their true focus area, while other firms are mostly asset managers focused on investments but not really helping their clients with their entire financial life. HB Wealth believes in the importance of combining both into one complete level of service for our clients, and invests in building our expertise in both areas.
This is a lengthy discussion, and we have a brochure solely focused on this topic. Key areas you should discuss with your potential advisor should include their thoughts on diversification, asset allocation, manager selection, active vs. passive strategies, manager monitoring, rebalancing, and risk management. Who is making the investment decisions and how often do they meet? How do they define investment success? How do they handle the ups and downs of financial markets? Do they focus on tax implications and estate implications when building your plan? This is a good topic to spend some time reviewing in detail with your potential advisor.
Many firms have wealth advisors also doing the investment strategy. At HB Wealth we have a dedicated investment staff focused solely on investments research every day, not on serving clients. But we mix in the client perspective and the experience of our partners by having both groups on our Investment Committee that makes our investment decisions.
In addition to most advisors being Certified Financial Planner® certificants, HB Wealth also has a dedicated financial planning department led by our Director, Financial Planning who can provide support and expertise to your client service team.
Families with estate planning needs can consult with one of our Wealth Strategists at no additional charge in order to be better prepared to seek updates with their estate attorney that align with their goals. Your client service team can engage with one of our Wealth Strategists (veteran estate planning attorneys) to spend time with you understanding your needs, evaluating your existing documents, and discussing potential new strategies.
Coordination
HB Wealth believes in serving as the leader of your financial team, effectively coordinating the activities of all of your advisors including your CPA, estate attorney, business attorney, bookkeeper, insurance agent, banker, and relevant family members.
Some firms will send you monthly or quarterly account balance information, but not true total return performance data. Other firms may give you an overall portfolio view, but no details on how individual managers or funds are performing vs. benchmarks or what is driving your overall performance. HB Wealth gives you online access to your entire portfolio at any time with updated values.
HB Wealth typically provides a summary of prior year tax-related activity to the CPA, including retirement contributions, charitable gifts, income, and other relevant information.
HB Wealth has invested in software that automatically pulls in 1099s and K-1s from the investment managers and custodians of our clients and organizes them in confidential folders accessible to their authorized CPA contact.
Continuity
HB Wealth has been helping clients for 35+ years and has a strong succession plan in place with a large staff that ensures continuity over time for your family. Some firms have only been around a few years, or have teams of people who have jumped around from firm to firm over time. We believe our long-term financial strength and growth through many ups and downs of the financial markets should give you comfort in our ability to work with your family for many years to come.
HB Wealth principals own the largest percentage of equity, not a bank or brokerage firm. We feel this independence allows us to focus on you as clients with our long-term strategy and investments.
Some firms specialize only in small clients or large clients. HB Wealth serves clients with portfolios from under $1 million in assets to over $100 million. We have the ability to handle the complexity of your financial life no matter where you end up on that spectrum.
At HB Wealth, the majority of our management team and board members are second-generation leaders for our firm. HB Wealth has already successfully completed the transition from being a founder-led firm to being led by the next generation guided by our core values that have never changed. We believe that it is important for your advisor to avoid being forced to suddenly sell or make radical changes to deal with the lack of a succession plan.
Learning More
We have included links in many of the Q&A items in this section but will repeat those and add a few more here that could be helpful resources for you as you search for a quality advisor.