Month: November 2021

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What Is Wealth Management And Do You Need It?

Wealth management can be thought of as a comprehensive service focused on taking a holistic look at a client’s financial picture, including services such as investment management, financial planning, tax planning and estate planning.

Wealth management is generally considered a “high-end” type of service, and some wealth management firms may require a certain level of investment assets or a minimum net worth. For clients who need this level of service, it can be useful to consolidate all types of financial advice in one place with just one firm.

Key wealth management objectives

Wealth management objectives will vary depending on the investor. Each client’s needs and situation are different, and good wealth advisors will tailor their advice accordingly.

Some key wealth management objectives for clients include:

  • Setting financial goals and designing strategies to achieve those goals
  • Helping clients maximize their overall wealth
  • Managing their investments and finances
  • Setting strategies for passing on their wealth, also known as estate planning

What is wealth management?

Wealth management is a holistic service that focuses on helping mid- to high-net-worth clients grow their wealth, manage their liability exposure and devise strategies to pass their wealth on to their designated heirs. Wealth management services take a comprehensive approach to the financial situation of higher-net-worth clients, versus working with an advisor focused solely on financial planning or investment management.

Some typical services offered by wealth management firms include:

  • Investment management and advice
  • Comprehensive financial planning
  • Tax planning and accounting services
  • Estate planning
  • Philanthropic planning
  • Legal services
  • Retirement planning

Some of these services may be offered in conjunction with an outside partner, however. Legal services are a prime example.

How much money is required for wealth management?

There are no hard and fast rules regarding how much is required for an investor to obtain wealth management services. Any minimums in terms of investable assets, net worth or other metrics will be set by individual wealth managers and their firm.

That said, a minimum of $2 million to $5 million in assets is the range where it makes sense to consider the services of a wealth management firm. Much below that and it might be hard to justify the expense of this type of service.

Again, these minimum levels will vary by firm. They may also vary a bit by your circumstances. For example, a wealth manager may want to take on the children of some of their current larger clients to help ensure the wealth they inherit stays with their firm. They may also want to establish solid relationships with younger professionals such as doctors or attorneys to retain their business once they start to earn much higher incomes.

How to choose a wealth manager

When choosing a wealth manager to work with, you’ll want to look at several things.

First, does the wealth management firm work with clients like you? Some wealth managers may focus on clients of a certain type and if your situation doesn’t fit with that type of client then that particular wealth manager may not be a good fit for you.

Second, you’ll want to look at the manager’s qualifications. Some criteria you might use in selecting a wealth manager include:

  • What professional designations do they hold? Examples might include CFP (Certified Financial Planner), CPA (Certified Public Accountant), CFA (Chartered Financial Analyst).
  • What is their level of experience in the wealth management space?
  • What services does the firm offer?
  • How often do you expect to communicate with them?
  • What types of fees do they charge?
  • Are they independent or part of a larger firm?

This table summarizes the basic differences between wealth managers, portfolio managers and financial advisors.

A wealth manager provides comprehensive, holistic advice in a broad range of financial and related areas.

These include, but are not limited to:

  • Investments
  • Tax and accounting services
  • Estate planning
  • Retirement planning
  • Comprehensive financial planning
  • Legal and estate planning
  • Philanthropy
 A portfolio manager is focused on investment management and generally doesn’t offer advice or services in areas beyond investments. This professional focuses on:

 Financial advisor is a term that can encompass a number of services. Financial advisors often provide advice on investments, financial planning, retirement planning and other related areas. This professional focuses on:

  • Financial planning
  • Basic retirement planning
  • Tax planning
  • Investments

Wealth management strategies

Wealth management strategies will vary based on the specific needs of the client. Overall, the reason to use a wealth management firm is to seek strategies to help maintain and grow your overall wealth. This can mean different things to different people.

In general, wealth management entails coordinating all the moving parts of a client’s financial situation into a comprehensive wealth plan. This might include their tax situation, investments and retirement planning.

Examples of wealth management strategies include:

  • Developing a comprehensive investment strategy covering all of the client’s various types of investment and retirement accounts.
  • Coordinating an optimal tax planning strategy into their wealth planning.
  • Ensuring that the client’s estate plans reflect their desires.
  • Developing a succession plan for business owner clients.

Alternatives to wealth management

If the fees or asset minimums required by most wealth management firms seem too high for you, your situation is probably not a good fit for a wealth manager. For those whose situation may not be right for working with a wealth manager, there are other options for getting financial advice:

  • Personal Capital is an online advisory and wealth management firm that offers a number of services with lower minimums and fees than a traditional wealth management firm.
  • Vanguard Personal Advisor Services is a service offered by Vanguard that provides advice and planning to clients.

There are a number of other online financial advisory services and apps that have popped up in recent years offering a wide range of services that range from very basic financial advice to some of the aspects of what would be considered to be wealth management. Robo advisors have grown in popularity in recent years and might offer a lower cost alternative if you are not yet at a place financially where engaging the services of a traditional wealth management firm is feasible for you.

FAQs

What does a wealth manager do?

Wealth managers provide holistic financial advice to help their clients grow and protect their wealth. This advice goes beyond just providing advice on a client’s investments or designing a financial plan for them.

Wealth managers generally work with clients with a higher net worth than a financial planner might. They often work with professionals in related areas such as tax professionals and attorneys to help design a comprehensive wealth planning strategy for their clients.

How does a wealth manager get paid?

Wealth managers may be paid in a variety of ways. Two common compensation methods are a flat-fee arrangement or compensation based on a percentage of client assets under management.

What is the difference between a wealth manager and a financial planner?

Financial planner is a term that can mean a lot of things. Financial planners usually focus only on doing financial planning for their clients.

Wealth managers provide comprehensive, cross-disciplinary services for their generally high net worth clients. Financial planning is just a first step in most cases. They integrate this with tax planning, investment advice, estate planning and other services to help clients achieve their goals.

Learn more:

Posted on

Canada’s Housing Imbalance Poses ‘Greatest’ Risk to Financial System, Watchdog Says

By Paul Vieira

OTTAWA–The current imbalance in Canada between solid demand for housing and the limited supply available is driving up prices and represents the “greatest” risk in the country’s financial system, Canada’s banking regulator says.




Peter Routledge, head of the Office of the Superintendent of Financial Institutions, said Tuesday that demand for housing remains strong across the country, leading to “very significant” price increases.


Recent data from the Canadian Real Estate Association indicated benchmark house prices in October rose more than 23{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} compared with the same period a year ago. In part, this increase is related to a lack of inventory available for buyers.


CREA estimates that as of October, there were nearly two months of housing inventory–or the amount of time it would take, given the current pace of transactions, for every active residential real-estate listing on the market to sell. CREA said the historical inventory average is roughly five months.


“The greatest prudential risk in Canada’s financial system is the supply-demand imbalance in housing,” Mr. Routledge said in a virtual speech to financial analysts in Vancouver, British Columbia. “The imbalance tends to drive price increases to ever higher levels relative to income; this in turn induces more Canadians to resort to more leverage when buying a home.”


Mr. Routledge cited recent data from the economics team at Bank of Nova Scotia, which calculated that Canada has the lowest number of housing units per 1,000 residents of any Group of Seven country.


Mr. Routledge added that the need to bring the level of housing construction aligned with demand “is an imperative for long-term financial stability.”


For the past decade and until recently, Canadian officials have targeted tougher rules on mortgage-financing to cool demand for housing and slow white-house price growth in major markets such as Toronto and Vancouver, British Columbia. Now, Canadian officials have signaled a shift in policy, eyeing billions toward building additional housing units in urban areas, tailored to middle-class households, as the best way to address housing affordability.


Earlier Tuesday, a senior Bank of Canada official said elevated household debt levels have re-emerged as a concern for the central bank, in part because of a sharp rise in housing prices.


Bank of Canada Deputy Gov. Paul Beaudry said the prevalence of highly indebted households –which are defined as those with a debt-to-income ratio above 350{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}–likely improved during the first year of the pandemic as many Canadians accumulated savings and paid down debt. But that trend appears to be reversing, he said, in part because of the worsening quality of Canadians’ mortgage borrowing in recent quarters.


Write to Paul Vieira at paul.vieira@wsj.com





	


	





		

		
Posted on 
Stock futures edge lower ahead of inflation data
	


			

			
							
		

	
	

		


Stock futures dipped Tuesday evening, holding lower following an extended rout in technology stocks. Investors also anxiously awaited a packed slate of economic data results out Wednesday before a holiday market closure. 


Rising interest rates coincided with a selloff in tech and growth stocks for a second day this week, with the Nasdaq dropping another 0.5{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} after Monday’s more than 1{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} decline. The Dow held up strongly and added nearly 200 points, with energy and financials stocks outperforming. The 10-year Treasury yield rose to near 1.7{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}. 


“Initially, the markets were happy with the FOMC decision [for Fed Chair Jerome Powell’s renomination] in the sense that it was sort of a continuity play to some degree. But then rates started to rise, and a lot of folks read rising rates as negative for big-cap tech,” Stuart Kaiser, UBS head of equity derivatives research, told Yahoo Finance Live. “So I think the tradeoff we’re going to have here is that, tech has been market leadership — it’s obviously a strong earnings growth and free cash flow engine for U.S. equities — but if you believe it’s going to come under pressure from higher yields, then you end up with kind of a difficult Catch-22.”


Investors are set to receive a deluge of economic data on Wednesday ahead of the Thanksgiving Day market holiday, with both the U.S. stock and bond markets set to close all day Thursday. These reports will include weekly jobless claims, along with the second estimate of third-quarter U.S. GDP. And importantly, the Bureau of Economic Analysis will release the October personal consumption expenditures (PCE) deflator, offering an updated look at the extent of the price increases still reverberating through the U.S. economy. 


The headline PCE deflator is expected to rise by 5.1{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} in October over last year for its fastest annual growth rate in more than three decades. Taken in tandem with a bevy of other data pointing to persistently high inflation, investors are speculating that the Federal Reserve will step in and raise benchmark interest rates from their near-zero levels next year to try and stem rising prices. 




According to other analysts, the market action this week — with a renewed rotation away from technology and growth stocks in the face of rising rates — could presage the investing environment for next year. 


“Today might be an example of what we see more of next year as the Fed moves into a mode of withdrawing liquidity from the markets and ending these pandemic-era policies, perhaps with rate hikes at the end of the year,” Jeffrey Kleintop, Charles Schwab chief global investment strategist, told Yahoo Finance Live. “And that means higher-valuation stocks, well, they tend to not do as well in environments of rising interest rates and tighter financial conditions.” 


“So you may want to look to be in those sectors that are maybe trading closer to their average valuations, looking to leadership like financials, energy,” he added. “The only caveat to that is when we see these upticks in COVID cases globally, it tends to favor those lockdown defensives like technology.” 


—


6:16 p.m. ET Tuesday: Stock futures open lower 


Here’s where markets were trading Tuesday evening:


    

  • 

    S&P 500 futures (ES=F): -4.75 points (-0.1{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}), to 4,683.75
    

    • 

  • 

    Dow futures (YM=F): -27 points (-0.08{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}), to 35,739.00
    

    • 

  • 

    Nasdaq futures (NQ=F): -17.25 points (-0.11{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to 16,294.75
    

    • 









NEW YORK, NEW YORK - NOVEMBER 15: A trader works on the floor of the New York Stock Exchange (NYSE) on November 15, 2021 in New York City. Following positive economic news out of China, stocks were up in morning trading on Monday with investors looking at retail sales and earnings results out from major U.S. companies later this week.  (Photo by Spencer Platt/Getty Images)






NEW YORK, NEW YORK – NOVEMBER 15: A trader works on the floor of the New York Stock Exchange (NYSE) on November 15, 2021 in New York City. Following positive economic news out of China, stocks were up in morning trading on Monday with investors looking at retail sales and earnings results out from major U.S. companies later this week. (Photo by Spencer Platt/Getty Images)




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Emily McCormick is a reporter for Yahoo Finance. Follow her on Twitter



















	


	





		

		
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Stocks mixed as tech-led drop extends, crude oil steadies
	


			

			
							
		

	
	

		


Stocks were mostly lower Tuesday with technology stocks under further pressure, as investors further mulled the market implications of Federal Reserve Jerome Powell’s renomination to lead the central bank.


The S&P 500 ticked down. A day earlier, the blue-chip index had set an all-time intraday high before pulling back to end in the red, with a drop in technology stocks weighing. 


U.S. West Texas intermediate crude oil futures (CL=F) recovered losses and rose after dropping more than 1{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} earlier in the morning. The move came after the White House announced it would be releasing a total of 50 million barrels of oil from the Strategic Petroleum Reserve (SPR), in tandem with similar moves from China, Japan, India and South Korea and the U.K., to try and ease rising energy prices with additional supply. 


Shares of Zoom Video Communication (ZM) slid even after the company posted better-than-expected quarterly revenue growth and full-year guidance, with usage of the video conferencing company’s software slowing amid the reopening. Companies including Nordstrom (JWN), The Gap (GPS) and Autodesk (ADSK) are set to report quarterly results on Tuesday.


Federal Reserve Chair Jerome Powell’s renomination to the top leadership position at the central bank captured market attention this week, with many investors reacting favorably to the likelihood that the Fed’s previously telegraphed monetary policy framework would remain in place with Powell’s reappointment. That includes expectations for current asset-purchase tapering to take place through the middle of next year, and for at least one interest rate hike to take place before the end of 2022.


“Continuity at a time of such extraordinary uncertainty is certainly welcome news. We have extraordinary uncertainty because we’re pivoting from the phase of the cycle where the Fed had been shoring up the recovery from the pandemic-induced recession, and … it did avoid a meltdown in financial markets,” Diane Swonk, Grant Thornton chief economist, told Yahoo Finance Live. “But now we’ve got very easy financial market conditions and we’re dealing with inflation. And having to pivot to dealing with inflation and tamp it down without derailing the recovery — that’s a very hard thing to pull off. We’ve not seen the Fed actually chase inflation down since the early 1980s.”


President Joe Biden also nominated Fed Governor Lael Brainard – previously viewed as a potential candidate for the Fed Chair position to replace Powell — as Vice Chair of the Board of Governors for the Fed. With these two nominations in place, market participants have turned their attention to who might fill he three vacant and soon-to-be vacant seats on the Fed Board, which includes the key Vice Chair for Supervision role. Biden said in a press statement Monday morning he expected to announce those appointments “beginning in early December.”




“Political decisions like this are competitions between affinity — you like someone in your own party — and convenience — what can you get the Senate to do for you, and will markets receive it well? You have to view the Powell-Brainard picks as part … of a bigger package,” Vincent Reinhart, Dreyfus-Mellon chief economist and macro strategist, told Yahoo Finance Live. “The White House is going to have three new governors to appoint, and presumably that’s going to tilt more progressive. So bottom-line, six months from now, the group of people that Chair Powell has to wrangle to make decisions is going to be more dovish than it is today.”


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9:49 a.m. ET: U.S. services PMI falls to two-month low, while manufacturing PMI rises to two-month high: IHS Markit


Closely watched indices tracking economic activity in both the U.S. services and manufacturing sectors showed a divergence in early November, with the supply constraints and rising prices dampening growth especially in private service industries. 


IHS Markit’s preliminary November U.S. services purchasing managers’ index (PMI) unexpectedly fell to 57.0 from 58.7 in October, marking the lowest level in two months. Consensus economists had been looking for the index to rise to 59.0, according to Bloomberg data. Readings above the neutral level of 50.0 indicate expansion in a sector.


The firm’s manufacturing PMI, however, rose to a two-month high of 59.1 and matched expectations. The manufacturing PMI had been at 58.4 in October. Taken together with the drop in the services PMI, the composite PMI for November fell to 56.5 from 57.6 in October, in a sign of slowing overall growth. 


“The slowdown underscores how the economy is struggling to cope with ongoing supply constraints,” Chris Williamson, chief business economist for IHS Markit, wrote in a press statement. Although supplier delivery delays eased to the lowest for six months, the lengthening of lead times remains far greater than anything seen prior to the pandemic, restricting output relative to demand and once again causing prices to rise sharply.” 


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9:34 a.m. ET: S&P 500, Nasdaq extend declines as tech drop continues


Stocks open mixed on Tuesday, with both the S&P 500 and Nasdaq declining as technology stocks added to Monday’s losses. 


The Dow hovered little changed, with financials and other cyclical stocks rising further following Federal Reserve Chair Jerome Powell’s renomination to keep his role as leader of the central bank. Goldman Sachs, Chevron and JPMorgan Chase outperformed in the 30-stock index, while Microsoft, Salesforce.com and Nike weighed to the downside. 


Treasury yields also gained across the long end of the curve. The benchmark 10-year yield rose more than 2 basis points to drift just below 1.646{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}. 


—


7:33 a.m. ET Tuesday: Stock futures mostly lower 


Here’s where markets were trading Tuesday morning:


    

  • 

    S&P 500 futures (ES=F): -1 point (-0.02{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}), to 4,678.75
    

    • 

  • 

    Dow futures (YM=F): +21 points (+0.06{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}), to 35,592.00
    

    • 

  • 

    Nasdaq futures (NQ=F): -26.75 points (-0.16{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to 16,355.25
    

    • 

  • 

    Crude (CL=F): -$0.42 (-0.55{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to $76.33 a barrel
    

    • 

  • 

    Gold (GC=F): -$9.30 (-0.51{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to $1,797.00 per ounce
    

    • 

  • 

    10-year Treasury (^TNX): +2.6 bps to yield 1.651{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}
    

    • 



—


6:06 p.m. ET Monday: Stock futures open slightly higher


Here’s where markets were trading Monday evening:


    

  • 

    S&P 500 futures (ES=F): +7.5 points (+0.16{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}), to 4,687.25
    

    • 

  • 

    Dow futures (YM=F): +49 points (+0.14{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}), to 35,620.00
    

    • 

  • 

    Nasdaq futures (NQ=F): +28.5 points (+0.17{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to 16,410.50
    

    • 









Traders work on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., November 8, 2021.  REUTERS/Brendan McDermid






Traders work on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., November 8, 2021. REUTERS/Brendan McDermid




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Emily McCormick is a reporter for Yahoo Finance. Follow her on Twitter



















	


	





		

		
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Independent Digital Ecosystems Are the Future of Wealth Management
	


			

			
							
		

	
	

		


Ask any advisor and they’ll tell you the No. 1 complaint they have about their technology solutions is that they don’t work well together and, as a result, require manual intervention throughout their processes and workflows. Because of this, many firms are running out of capacity, can’t scale and are leaving growth opportunities on the table.


This is not a new phenomenon—and it continues to plague the wealth management space, as it has for decades—despite the many advancements in technology and the efforts by industry leaders to create unified integration environments.


The closest the industry has come to solving this problem was the award-winning efforts from TD Ameritrade Institutional in building its Veo open-architecture system, the first iteration of which launched more than a decade ago. Veo held much promise in sharing APIs directly with advisor technology third-party software vendors to create integrations to the underlying accounts and data needed by the core systems advisors use to process business and service clients. However, due to the continuing consolidation of advisor technology, it looks as if Veo will be phased out with some portions of the platform moved onto Schwab’s systems by 2023. 


What TDAI had created with Veo is what is known in other industries as a “digital ecosystem.” A digital ecosystem is a group of interconnected information technology resources that can function as a unit. Digital ecosystems are made up of suppliers, customers, trading partners, applications, third-party data service providers and all their respective technologies. Interoperability is the key to the ecosystem’s success.


Digital ecosystems are frequently created and controlled by market share leaders and are quickly influencing change in many industries. The integration of business-to-business practices, enterprise applications and data within an ecosystem allows an organization to control new and old technologies, while building automated processes around them in order to consistently grow their businesses and box out competitors.


This approach is a strategy that TDAI was not alone in pursuing. Following that firm, Schwab, Fidelity and Pershing each launched their own initiatives. And Pershing, with its recent announcement of “Pershing X,” has announced another. Others, including technology-fueled TAMPs such as Orion, Envestnet and SS&C, have all attempted through different methods to control the advisor technology ecosystem via acquisitions, strategic partnerships and sales bundles. 


The problem with these custodian- and TAMP-led projects is that they are all competitive in nature and proprietary to that platform, designed to aggregate an advisor’s business—which is why they work only with that platform’s accounts and data. It is a popular strategy for attempting to lure business through their technology pipes, build a competitive wedge and attempt to control the advisor desktop. The reality for advisors, however, is that they are independent for a reason and want their technology to be as well—and not dependent on any third party. Advisors also use multiple custodians and TAMPs, have existing technology they have already invested in, and don’t always want or are unable to use the preferred technology partnerships the platforms have preselected for their integrated bundles.


What is needed is a new approach to creating digital ecosystems that advisors can design and host themselves, so that they can own their own data and integrate the systems and tools that best fit their value proposition, customized to their needs. In other words, an independent version of TDAI’s Veo that advisors can own and create for themselves, not dependent on anyone else.


This is what the big institutions do in creating their own technologies that run their businesses and historically have been available only to the mega-firms due to the enormous costs and infrastructure needed to develop and run them. The good news for advisors today, however, is that with new advancements in technology through cloud-native platforms, the ability to create your own digital ecosystem is now feasible at affordable price points, with far greater speed to market and more ability to scale than ever before.


The concept of “integrated digital ecosystems as a service” is a new approach to customizing an advisor’s technology that holds great promise to bring any third-party application into your own ecosystem and customize it to fit your needs.


Through an integrated digital ecosystem, advisors and financial institutions can digitally transform their legacy proprietary applications, antiquated third-party integrations and complex business processes by avoiding costly pitfalls related to failed digital transformation projects and by enabling these firms with a robust technology framework and developer tool set to quickly scale, customize and build a unique and unified cloud-native user experience across the entire wealth management value chain.


Essentially, firms are able to build their own “app stores” that they control, select and can seamlessly bring together in an integrated framework and environment.


Just think of how this can transform your business, enabling you to finally have automated workflows, seamless integrations with your various software solutions, TAMPs and custodians, all customized, owned and controlled by you, the business owner.


You will gain the scale and capacity to grow your firm and ultimately digitally transform your business. Particularly as the industry is becoming more complex, competitive and is consolidating on a daily basis through M&A leaving you with fewer and fewer options. Now is the time to finally own your independent technology destiny.


Stay tuned for the next article in this series where I will provide more detail on the underlying methodologies and technology that powers an integrated digital ecosystem and how you can deploy this powerful technology in your business.


Oleg Tishkevich is CEO and founder of INVENT, a cloud-native technology platform focused on the wealth management industry. 



	


	





		

		
Posted on 
Recent widows need financial guidance after a spouse’s death
	


			

			
							
		

	
	

		








Anuchit Sirikangwan / EyeEm | EyeEm | Getty Images










You’ve experienced an incredible loss. Now it’s time to think about protecting your future.


Losing a spouse could be one of the most difficult things someone will ever face. However, despite the emotional hardship, a widow can emerge from the loss stronger than ever and more capable of managing their financial future.


It’s evident that money issues can be one of life’s biggest stressors — but it doesn’t have to be. Once you are ready to take control of your financial situation, there may be things you find you need more clarity and instructions on. There may be some bigger questions you have about your financial future, like how to make your money last.


You may also need help settling your spouse’s estate, transferring assets to your name, closing accounts, updating beneficiaries and planning for your future needs. For all of these questions, a financial advisor can help.












More from Advisor Insight:




Here’s a look at other stories impacting the financial advisor business.














Various surveys show that nearly 80{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} of women will at some point become the sole financial decision-maker in their life. What’s more, many widows will spend several decades controlling their own finances.


To that point, half of all women who become widowed in the U.S. are under age 59. Since the average life expectancy for women is 79, that means those women often find themselves managing their finances by themselves for at least two decades.


While some women enjoy managing their finances on their own, others will prefer working with an advisor. For those seeking guidance on key issues like estate planning, tax planning and long-term financial planning and investing, it’s crucial to work with a financial advisor who understands your unique needs and goals.


A recent study conducted by UBS found that 85{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} of women manage everyday expenses, but only 23{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} take the lead when it comes to long-term financial planning. So, even though women are proactive with their day-to-day household finances, they don’t necessarily have experience making long-term financial-planning decisions and managing an investment portfolio.


You may already have an established a relationship with a financial advisor before your spouse’s death. If you like that person, then it’s time to schedule a meeting with them to get “reacquainted” and discuss what your future financial plans are now.






However, you may end up going to another advisor who feels like a better fit. If you do decide to make a change, know that you are not alone. To that point, 80{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} of widows switch financial advisors within a year of their husband’s death.


Why? Because in many cases, the advisor had a relationship with the deceased spouse and never fully involved the wife in the financial-planning and investing processes.


It’s important to take your time and find a financial advisor you trust and one who understands your specific financial needs and goals.


Truth be told, anyone may call themselves a “financial advisor.” Just because someone says they are a “financial advisor” doesn’t mean that they have any specific education, background, experience or certification which actually qualifies them to give financial advice.


There are advisors, brokers, broker-dealers, certified financial planners, chartered financial analysts, certified investment management analysts, investment advisors and wealth managers, to name a few. To be sure, choosing an advisor can be confusing and overwhelming.






The bottom line is that the financial advisor you choose should be a fiduciary, fee-only advisor.


An investor study by Personal Capital revealed that nearly half of Americans mistakenly believe that all financial advisors are fiduciaries required to act in their client’s best interest at all times. But that’s just not true.


The fiduciary standard is when a financial advisor is legally bound to act in your best interest. Fiduciary advisors must put their clients’ interests before their own.


Others who call themselves advisors are only held to a suitability standard, meaning they only must suggest products that are suitable for you — even if they’re more expensive and earn them a higher commission.


Additionally, fee-only financial advisors earn money from the fees you pay for their services. These fees may be charged as a percentage of the assets they manage for you, as an hourly rate, or as a flat rate. Almost all fee-only advisors are fiduciaries.




Finding the right advisor fit








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Regardless of which kind of advisor you choose, you should make sure you know how they earn money. This helps you determine if their recommendations are actually better for you.


In fact, alarm bells should go off if the advisor you are interviewing does not clearly explain how they get compensated. If their fee structure is unclear, ask them to clarify the details.


You should also be on high alert if they propose to meet with you only once a year. A yearly meeting is insufficient, especially after the loss of a spouse. You deserve an advisor who will be available to you through all the ups and downs of the new path you’re forging.


Your relationship with your financial advisor should be a positive one. When you leave your advisor’s office, you should feel heard and know that your goals, priorities and concerns were all taken into account.


Working with a financial professional requires you to be vulnerable about highly personal aspects of your life — especially after losing a spouse.


Remember, you’re paying for your advisor’s time and services just as you would with a doctor or lawyer. You should always feel encouraged to ask questions and empowered with the knowledge that you’re in the driver’s seat of your financial life.


— By Stacy Francis, president and CEO of Francis Financial