Client Login
Since our firm was founded by John Cooke in 1969, we’ve seen remarkable changes, like multiple market cycles and economic shifts, as well as major milestones in our family’s legacy and those of our clients.
But some things stay the same – through this time, we’ve earned a remarkable client retention rate, we’ve maintained client relationships across generations, and we’ve been consistently recognized by some of the most respected publications in the industry as one of the leading advisories in the country today.
We put stock in things that last, and so do our clients.
Brian Cooke and Chris Cooke
ranked #1 and #2
Brian Cooke and Chris Cooke
ranked #1 and #2
Brian Cooke and Chris Cooke
ranked #1 and #2
Brian Cooke and Chris Cooke
ranked #1 and #2
Brian Cooke and Chris Cooke
Brian Cooke and Chris Cooke
Brian Cooke and Chris Cooke
Brian Cooke and Chris Cooke
Brian Cooke and Chris Cooke
Brian Cooke and Chris Cooke
Forbes Best-in-State Wealth Advisors (2020). Chris and Brian Cooke were named to the Forbes’ 2020 List of Best-in-State Wealth Advisors, a ranking of the best national, regional, and independent firms in the United States, for the third consecutive year. Out of more than 29,000 nominations submitted, the Cooke brothers were ranked #1 and #2 in the state.
Forbes Top 250 Wealth Advisors (2020). The Forbes list of top wealth Advisors includes 250 Advisors across the nation selected from more than 25,000 nominations by SHOOK Research.
Forbes Best-in-State Wealth Advisors. The Forbes Best-in-State Wealth Advisors list is developed by SHOOK Research and ranks more than 2,000 Advisors based on a combination of qualitative and quantitative criteria determined through due diligence interviews, revenue trends, assets under management, compliance record, and track record for encompassing best practices. To qualify for ranking, an Advisor must have a minimum of seven years of experience. Ranking does not evaluate the quality of services and is not indicative of an Advisor’s future performance.
#1 Family Team in America as ranked by The Winners Circle and Research magazine in 2008. Each Advisor on this year’s Research magazine list was filtered down from a national list from securities firms, banks, independent firms and more. The Winner’s Circle team vetted each Advisor through a host of quantitative and qualitative criteria including assets managed, revenues, experience levels, acceptable compliance records, discussions with management and more. Because client portfolios vary and are typically unedited, portfolio performance is not a criterion; instead, The Winner’s Circle focuses on customer satisfaction and client retention.
Barron’s Top 1200 Advisors (2013.) Rankings based on assets under management, revenue generated for Advisor firms, quality of practices, and other factors.
Barron’s Top 1000 Advisors (2012.) The rankings are based on data provided by 4,000 of the nation’s most productive Advisors. Factors included in the rankings were assets under management, revenue produced for the firm, regulatory record, quality of practice and philanthropic work. Investment performance is not an explicit component.
Barron’s Top 1000 Advisors (2009–2011.) The number of Advisors shown for each state is based on the total population of the state, so larger states have larger listings. Generally, the rankings reflect assets under management, revenues, quality of the Advisors’ practices and other factors. Total assets are all assets overseen by the Advisor’s team, including some that are held at other institutions. Assets managed for institutions are given less weight in the scoring. Portfolio performance is not a criterion because most Advisors do not have audited track records. Criteria based on more than 3000 filtered nominations from more than 100 investment, insurance, banking and other related independent financial service firms.
Barron’s Top 100 Financial Advisors (2004–2009) criteria generally based on more than 7,000 filtered nominations from more than 80 investment, insurance, banking and other related firms, which were narrowed down by quantitative and qualitative criteria as well as by examining regulatory records and talking with peers, supervisors, clients and the Advisors themselves. Portfolio performance is not a criterion because most Advisors do not have audited track records.
Financial Times Top 400 Advisors Rankings are based on data provided by investment firms. Factors include assets under management, experience, industry certification, and compliance record. Investment performance and financial Advisor production are not explicit components.
Five Star Wealth Manager Award (2012.) Survey conducted by Five Star Professional, an independent third-party research firm, who received nominations among all Wealth Managers in the area from peers or firms and evaluated the nominees based on 10 objective criteria including client retention rates, client assets administered, firm review and favorable regulatory and complaint history.
Five Star Wealth Manager Award (2010–2011) is bestowed on Wealth Managers who scored highest in overall satisfaction based on surveys conducted by Crescendo, a third-party research firm who evaluated feedback from clients, peers, and industry professionals. Scoring based on criteria, including customer service, integrity, knowledge/experience, recommendations, and overall satisfaction. Selected are the top scoring candidates representing less than 7% of their market. The rating is not representative of any one client’s experience as the rating reflects an average, or a sample, of all client experiences, and is not guarantee as to a client’s future investment success or an Advisors selection or performance in the future.
Indianapolis Business Journal Forty Under 40 criteria based on 40 local business and professional leaders who have achieved success before the age of 40. These people have demonstrated leadership, initiative, and dedication in pursuing their careers, and are likely to continue to achieve in the future.
On Wall Street Top Advisors Under 40 criteria based on age requirements of 39 years of age and under. Executives at wire houses and full-service regional firms were asked to identify their top three brokers based on assets under management for the first nine months of this year. With a few exceptions, these are the largest asset gatherers under 40 at their firms. In the case of a team member, the assets we report for the person is in the same proportion as the individual’s production within the team. Candidates also had to offer comprehensive financial planning and wealth management services, generate at least 50% of their revenues from fee-based accounts, and have no compliance problems in the past five years.
Registered Rep Outstanding Advisor Award criteria based on: 1) Superior performance in money management, client service, business building and philanthropic activities; and 2) Acknowledged peer recognition and respect.
Registered Rep America’s Top 50 Financial Advisors. Rankings based on a combination of objective and subjective factors, including production, assets under management and tenure at current firm. Indy’s Best and Brightest criteria based on age requirements, residential requirements, professional accomplishments, and leadership qualities in workplace or community. Selection committee chooses 100 total nominees in 10 categories as finalists; committee then selects 10 winners.
Research Magazine/The Winner’s Circle criteria generally based on more than 7,000 filtered nominations from more than 80 investment, insurance, banking and other related firms, which were narrowed down by quantitative and qualitative criteria as well as by examining regulatory records and talking with peers, supervisors, clients and the Advisors themselves. Portfolio performance is not a criterion because most Advisors do not have audited track records.
The maximum amount of money you can contribute to your retirement accounts each year are known as retirement contribution limits. The amounts that can be contributed each year can change as they’re indexed to inflation. This year, in 2023, the changes are more significant because inflation was higher in 2022.
What do the increases mean for you? As with most things regarding retirement, it varies depending on your age. We’ve compiled a list of some of the limit increases for you below – changes are bolded – and share some highlights on changes also happening this year as part of the “Secure Act 2.0.”
2023 - $22,500; individuals age 50 and up can contribute an additional $7,500 ($30,000 total)
2022 - $20,500; individuals age 50 and up can contribute an additional $6,500 ($27,000 total)
2023 - $6,500; individuals age 50 and up can contribute an additional $1,000 ($7,500 total)
2022 - $6,000; individuals age 50 and up can contribute an additional $1,000 ($7,000 total)
2023 - $15,500; individuals age 50 and up can contribute an additional $3,500 ($19,000 total)
2022 - $14,000; individuals age 50 and up can contribute an additional $3,000 ($17,000 total)
2023 - Contributions by Indiana taxpayers qualify for a 20% tax credit with a new maximum credit of $1,500 for a $7,500 contribution
2022 - Contributions by Indiana taxpayers qualify for a 20% tax credit with a maximum credit of $1,000 for a $5,000 contribution
The SECURE 2.0 Act of 2022 is a law designed to substantially improve retirement savings options. The Act contains over 90 new provisions to promote savings, boost incentives for businesses, and offer more flexibility to those saving for retirement.
Here are 5 highlights we find significant and take effect in 2023:
We hope you can use the retirement limit increases this year to your advantage. If you have questions about any of the above information, please email us at [email protected].
Registered Representatives of Sanctuary Securities, Inc. and Investment Advisor Representatives of Sanctuary Advisors, LLC. Securities offered through Sanctuary Securities, Inc., Member FINRA, SIPC. Advisory services offered through Sanctuary Advisors, LLC., an SEC Registered Investment Advisor. Cooke Financial Group is a DBA of Sanctuary Securities, Inc. and Sanctuary Advisors, LLC.
The short answer to both questions is it depends on the situation. Sometimes it’s of value to you and other times it’s not.
No matter why your advisor changed firms, they will ask you to transfer all your assets from the old firm to the new firm. This transfer process is called an ACAT – automated customer account transfer. It’s a method by which we transfer financial assets between banks and brokerage houses.
Before you ever sign an ACAT it’s an incredibly valuable step to review FINRA Broker Check. Type in your advisor’s name and city to see results. This will give you an indication if there are any problems traveling with your advisor from the old firm to the new firm. You should be aware if such problems exist.
Important questions to ask yourself about your advisor include:
These are a few ways to help determine if your advisor is making a move for the right reasons and help you feel at ease. If you have any doubts that’s a warning you should examine their move further.
Let’s explore a couple different “changing firm” scenarios.
If your financial advisor changes from one large brokerage firm and move to another large brokerage firm – or a regional brokerage firm – this move tends to come with a large bonus payment.
Typically, the bonus payment for your advisor to make the move could be anywhere from 100%-300% of their last year’s revenue. The new firm is in effect buying their business and you the client are part of what’s being purchased.
It’s essential for you to evaluate why your advisor is making the move. If it’s for money, and for no particular benefit to you then it might not be in your best interest.
Some important questions you might ask your advisor to give you a better understanding are:
Make certain your financial advisor is clear when answering. The answers to these questions need to be satisfactory to you. If not, you should assess the move more.
If your financial advisor leaves a large brokerage firm to move to an independent firm, there’s usually no substantial bonus payment for them to make this move. There are likely other reasons.
This kind of move can be made to become more independent, objective, and unbiased. Perhaps they’re making the move so they can offer you a wider array of investment options.
If this scenario describes your advisor, it’s still essential for you to evaluate why they’re making the move.
In most instances your advisor’s change to an independent firm will give you access to more investment opportunities, especially local ones they were unable to offer before. Make sure your financial advisor is clear when answering. The answers to these questions should be suitable for your situation. If not, you should review the change in more detail.
Sometimes in a career a financial advisor, or financial advisor team, might make 1 or 2 changes. On the other hand, you might see an advisor change firms more frequently in their career. In either example they might be making the changes for all the right reasons.
When an advisor moves the new firm almost always wants a non-compete. In many cases non-competes last anywhere from 7-10 years.
Anytime you notice a financial advisor moving from firm to firm every 7-10 years it may send up a red flag and suggest they’re moving because their non-compete ends. This move means more money. If they move before their non-compete ends, they must pay their bonus back. A track record with this pattern may indicate the moves aren’t for better opportunities or client outcomes, and instead it’s only a better paycheck for the advisor.
It's worth evaluating the reasons why your financial advisor is changing firms and how it might affect you before ever signing an ACAT.
We hope whatever conclusion you come to on your financial advisor’s change benefits you, your family, and your financial assets. If you ever desire a second opinion before you move, please email us at [email protected].
Registered Representatives of Sanctuary Securities, Inc. and Investment Advisor Representatives of Sanctuary Advisors, LLC. Securities offered through Sanctuary Securities, Inc., Member FINRA, SIPC. Advisory services offered through Sanctuary Advisors, LLC., an SEC Registered Investment Advisor. Cooke Financial Group is a DBA of Sanctuary Securities, Inc. and Sanctuary Advisors, LLC.
Yes, cryptocurrency losses are tax deductible. This question is timely as we near year end because conversations with clients tend to include tax-loss harvesting.
Tax-loss harvesting is the process of offsetting your gains with losses to try and minimize your tax liability.
To put this in perspective, if you have $100,000 in gains and you have $100,000 in losses in crypto you should sell your crypto to bring your tax liability down to $0.
Anytime you hold a loss in cryptocurrency, it’s in your interest to sell up to the extent that you have gains elsewhere.
Because cryptocurrencies are relatively new the IRS hasn’t classified them as a traditional financial security yet. The rules are a little different.
The biggest instance of this is there are no “wash sale” rules for cryptocurrencies.
Let’s say you have losses in Bitcoin. With no “wash sale” period you can sell your position in Bitcoin and a minute later buy back the same Bitcoin. Functionally nothing changes other than missing out on a small window of price movement. However, you get to book that entire loss on your taxes.
Most people don’t know this because in traditional investments you need to wait 30 days before you can buy back a security you sell for a loss to avoid a “wash sale” where they disallow that loss. You can buy a different fund that has similar holdings, but it must be different to make sure you’re not buying back the same thing.
Crypto is different. You can buy back the same thing immediately after selling it for a loss.
This specifically pertains to cryptocurrency held directly and traded on exchanges. If you’re holding crypto through an ETF or mutual fund vehicle, that vehicle will have the same rules as traditional finance including honoring a 30 day “wash sale” period to realize any losses.
When it comes to reporting your crypto transactions, the IRS does want you to let them know what you’ve been doing.
There are a lot of tools that exist to help you report your crypto activity. Depending on the exchange you use, you can link that to a tool which will track your trades. Make sure whatever you use calculates your gains and losses. This will help you produce a file you can provide your accountant for filing with the IRS.
Our opinion is if you’re holding unrealized losses in cryptocurrencies that are not custodied in a brokerage account you should book those losses to offset any gains you have elsewhere.
Crypto losses can help you with other investment rebalancing. If there is a highly appreciated fund you would like to sell and you know you have additional losses in your crypto you can go ahead and book those losses and then sell your appreciated securities. The gains and losses will offset and eliminate current tax liability. Otherwise, you might pay taxes on gains you wouldn’t have needed to pay.
Remember, your goal is to zero out your gains and losses if possible in the current tax year. Good luck fully utilizing any crypto losses you might have in your crypto portfolio.
Registered Representatives of Sanctuary Securities, Inc. and Investment Advisor Representatives of Sanctuary Advisors, LLC. Securities offered through Sanctuary Securities, Inc., Member FINRA, SIPC. Advisory services offered through Sanctuary Advisors, LLC., an SEC Registered Investment Advisor. Cooke Financial Group is a DBA of Sanctuary Securities, Inc. and Sanctuary Advisors, LLC.
Often the answer is yes to that question, especially if you’re the one asking it. It probably means you have some extra savings and are thinking big picture.
It can be a very good time for you to invest during a recession for a couple of reasons:
These 2 factors combine for an opportunity for you to invest as prices come down. For example, you might be able to buy stocks, bonds, or real estate that look like great investment opportunities, but are normally too expensive to purchase.
In the midst of a recession prices will tend to be near their lows. Remember, the stock market is usually a leading indicator -- stock market prices may be cheapest 3 or 6 months before a recession ends. The market will begin to recover BEFORE the economy recovers. History says 1 – 2 quarters ahead is a good estimate.
Staying consistent with our general financial planning and wealth management advice we think trying to time your investment at the perfect moment is not what you should focus on.
Recessions tend to be fairly short which can make them tricky to time. Capital Group’s analysis of 11 cycles since 1950 shows that recessions have persisted between two and 18 months, with the average spanning about 10 months.
If you plan on investing during a recession, and in general, you’d be wise to take a long-term investment horizon approach.
As prices begin to recover and as people’s expectations go higher stock prices tend to go higher.
So yes, investing during a recession can work very well, and we think it’s something you should consider if you’re able to do so.
If you have any questions give us a call at (317) 814-7800.
As of writing this article we’re not certain we’re in a recession. We do believe there’s a small or medium size recession coming.
News media does a great job of highlighting the negatives of the financial world such as theft and reckless negligence, but news also does a terrific job of highlighting positives. We are honored to be included in numerous best-of-lists in Forbes, Barron’s, and Financial Times.
Brian & Chris Cooke were named the #1 & #2 Best-In-State advisors in Indiana, as well as being named among the Top 250 advisors in the country for 2021. Forbes/SHOOK has ranked Cooke Financial Group the #1 Best-In-State advisor in Indiana for four consecutive years: 2018, 2019, 2020, and 2021.
Chris Cooke was also recently quoted in Forbes on the topic of the Robinhood IPO
Brian & Chris Cooke are both named among the top advisors in the 2021 Top 1,200 Advisors list, and the Top 10 Advisors list for Indiana.
Chris Cooke is also featured in the Barron’s video, “What do you do if your financial advisor retires?”
Chris Cooke shares thoughts and insights in this recent article from The New York Times
Chris Cooke is quoted in Financial Advisor HQ on opportunities for growth and outperformance
There are many options in the market when it comes to investing your savings.
If you have a background in finance and understand the markets, then you may very well create your own portfolio custom tailored to your financial goals. Most people, however, do not have high knowledge levels about financial products and markets.
This is where investment managers and/or financial advisors come into the equation. People can seek their services, discuss their financial goals, and rely upon the investment managers to advise them about appropriate investment options.
Out of a plethora of investment options available in the market today, there is one called the “Separately Managed Account (SMA)”.
This is an investment option generally accessible only by high net worth (HNW) and ultra-high net worth (UHNW) individuals/families/institutions. SMA accounts usually have a high minimum deposit limit that may be $1 million or more. But before we get into the intricacies, let’s start by understanding what a SMA is.
A separately managed account is an account or group of accounts in which an asset management firm acts as the investment advisor or investment manager to an investor and builds a portfolio for that investor.
The account is custom tailored to needs of that individual investor and solely owned by that investor. It is not commingled with any other investor’s funds. The money manager is responsible for investing all or a portion of the assets in the account according to the investor’s investment goal. The investment manager should use an investment strategy designed to meet the investment goal of the investor.
A separately managed account is an investment vehicle combining the best elements of a mutual fund and a separately managed portfolio. Diversification and professional management are part of both methods, but a separately managed account can also be tailored to the unique needs of the investor.
In a mutual fund there are many investors and there is no customization for the benefit of any single investor. The fund is more of a passive investment vehicle with a pre-determined investment strategy that is managed by a professional portfolio manager. The SMA is potentially more active and may add tax management, ESG characteristics, or specific portfolio additions or prohibitions that relate to its owner’s specific needs.
Most banks, wirehouses, RIA’s, and other investment managers have hefty minimum’s between $50,000 and $100,000 to more directly target high net worth individuals. Using primarily SMA accounts for those individuals often raises those minimum relationship sizes to $500,000 or $1 million.
An investor with three or four SMA accounts (ex US stock, International stock, Bonds) may have to meet account minimums for every single SMA manager. Total required funds are significant when created a well diversified portfolio.
Again, separately managed accounts are different from mutual funds and basic brokerage accounts. The funds in a separately managed account are owned, controlled, and managed on behalf of a single investor. A mutual fund may have many different owners with very different goals and objectives. These individual needs are not considered in the management of the fund.
The investment manager of the account will typically select the assets in the account and will make the investment decisions based on the financial and investment goals of the investor/owner of the SMA. The investment manager will have the authority to make trades in the account.
The separately managed accounts can comprise any asset class including:
The fee structure of smaller SMAs is often higher than that of a mutual fund because of an SMAs personalized investment choices and extra services on behalf of the investor/owner. However, the SMA fee is often a declining % fee as the asset size increases.
In other words, the asset % fee charged goes down as the value of the portfolio rises. There is a point at which many SMAs become cheaper than a corresponding mutual fund! This point is often reached on multi-million dollar portfolios, but infrequently on portfolios less than $1 million.
Separately managed accounts come with numerous benefits:
There are however a few drawbacks with SMAs:
The bottom line is separately managed accounts are usually best for individuals who are looking for greater control, diversification, and customization of their portfolio.
SMAs may not be the best choice for everyone but those who prefer more control over how their funds are invested frequently find SMAs a suitable option.
Again, appropriate due diligence and finding the best run SMA accounts is important. Assess the performance, experience and investment ideology of a number of asset management firms before you engage one.
A 401(k) is a retirement plan that allows employees to set aside a portion of their pre-tax earnings (regular 401k). This “payroll deferral” money can be invested in a variety of investment funds within the 401k plan, and the earnings on the investments are not taxed until the employee withdraws their money (generally at or after retirement age). Employers may also match employee contributions to the plan up to a certain amount. For example, an employer may contribute 50 cents for every dollar an employee contributes up to the first 6% of the employee’s salary. This would mean if the employee contributed 6%, then the employer would add 3%, for a total annual contribution of 9% of pay toward the employee’s retirement account.
401(k) accounts are for retirement savings and need to have risks managed appropriately. These accounts generally need to be invested in broadly diversified investments to reduce the risk of a substantial loss (which might occur if you owned only one or two stocks in a concentrated portfolio). Broad categories such as “large US stocks” or “fixed income” are offered through well diversified investment choices in a 401k plan. For this reason, many 401(k) accounts are managed and run by large, well-known financial services advisory companies such as Fidelity Investments, the Vanguard Group, or other large mutual fund complexes.
The 401k accounts are usually monitored and controlled by an investment professional working with the employer’s 401k plan trustees. Since the 401(k) accounts are the employee’s retirement plans, the plan trustees should choose investments that carry lower risks. For this reason the account holders are usually limited to investments within a restricted list (10 – 20) of diversified asset classes. 401k plans usually provide the option of choosing between mutual funds with varying investment strategies including US equities, international equities, fixed income (bonds) and cash.
This is when we ask an important question:
“Should I use a financial advisor or choose my 401k plan investments by myself?”
You do not necessarily need a financial advisor for 401(k) if you know and understand which mutual funds to choose for your 401(k) and you have some investment experience. In this case you may manage your own 401(k) through consultations with your 401k fund manager. This is one of the biggest 401(k) advantages and helps to make 401(k)s a (reasonably) hassle free passive investment plan.
But it is not a bad idea to hire a financial advisor to assist you when determining your 401k fund allocation (mutual fund mix). Factors such as your age, risk tolerance, earning potential, and lifestyle goals should be considered thoroughly. Working with a financial advisor may help maximize the long term/average returns on your 401(k) by reaching a “best” decision based upon all of these factors. Many investors who are inexperienced, very risk averse, or generally nervous about investing may make poor investment allocations, typically by being too conservative and “loss averse”. If average expected returns on 401(k) are between 1% (cash/bonds) and 8% (diversified equities), then a financial advisor can help maximize the returns and minimize risks within the employee’s risk tolerances. The financial advisor can also help the employee avoid making poor decisions during periods of market volatility (short term loss) by offering an experienced, educated bit of advice.
Traditional 401(k) accounts are managed using mutual funds and they provide a narrow list of diversified classes of assets for investment. Some people prefer to take investment matters into their own hands by opting for self-directed 401(k) or self-directed individual retirement accounts.
Self-directed 401(k)s are offered by many financial institutions. They allow access to a broader class of assets such as individual stocks, ETFs, precious metals and REITs etc. Self-directed 401(k)s however are generally not passively invested. They require actively creating your own portfolio and monitoring your portfolio. This more active level of involvement is why most people using a self-directed account hire a certified financial planner or advisor to assist them.
A financial advisor can be a great resource to have in your corner. They can help you navigate the complex world of investing, and help you plan for your future. However, the financial advisor is not a necessity. If you are interested in investing, and commit enough energy to your plans, you can do it yourself. The basics of investing are not hard to understand.
If you can understand these concepts and feel comfortable with your investment options, then you can formulate your own investment strategy. But this is not the only service that financial advisors provide. Having a financial strategy is one thing, successfully executing it is another. In order to execute your strategy, you should also understand market cycles and have knowledge of all the investment options available to you. Occasional rebalancing and tactical tilting of a portfolio may add additional value and increase your results. All these steps can be used to create a diversified portfolio that suits your investment goals.
While most 401(k) accounts are designed to be infrequently traded, what about retirement planning (more broadly than just your 401k)?
Retirement planning requires knowledge of many additional factors such as:
This is not easy. Doing it on your own means any mistakes create risks for retirement nest egg shortfalls. This is a primary reason why individuals are well-advised to seek the services of a financial advisor for more comprehensive retirement planning.
Your 401(k) account is just one expected income stream in your retirement life. Almost everyone will require multiple income streams and wealth creation strategies to live a comfortable (financially secure) life during retirement. Achieving these goals is more likely done with the guidance of a qualified financial advisor. Your financial advisor can help make sure you are saving enough money for retirement and that you're not taking on unnecessary risks. This will help you get the most out of your 401K, and other available income streams.
Another question many people ask is should I get a financial advisor in my 20s? Or is this too early for retirement planning? The answer is yes, the earlier you start the better, and a financial advisor’s guidance can get you started on the right path. In your 20s, a certified financial planner with experience can help you craft the best retirement strategy that will help you live a life of comfort.
The charges for financial advisors vary and can take different forms. The most experienced and highly reputable financial advisors costs are higher, but for a reason. But most financial advisors have reasonable rates.
The following chart can help you understand this better.
| Basis of Fee | Average Rate |
| Annual | $2000 - $7500/annual retainer |
| Hourly | $100 - $400/hour |
| Plan based fee | $1000 - $3000/plan |
| Based on the value of portfolio | 0.5% - 1%/based upon assets under management |
Financial advisors are professionals who know and understand the markets. Many of the best have designations like “certified financial planners” (CFP) for a reason. They are trained and qualified to provide these services. By hiring the financial advisor you will cut down the workload and due diligence that you must perform personally, and you gain access to industry knowledge, competence and expertise. This is where financial advisors help you attain your financial goals and plan for a retirement life of financial security and comfort.
Are you considering private wealth management services?
Would you like to know what the difference is between wealth management vs a financial advisor?
In this article, we will examine what financial advisors and wealth management companies do to support your financial goals.
Let’s start by helping you set the appropriate financial expectations for using either service.
If you’re considering hiring a wealth management advisor, you may want to think about your budget. Wealth managers and financial advisors do not provide free services.
Just like any other service, they do expect to be compensated for their work. This is why it is so important to choose an advisor who provides services that can fit comfortably within your budget.
There are two different types of payment structures for financial management services. One is fee-based and the second is fee-only.
In most cases, advisors will provide you with a brochure or Form ADV to outline their services, offers, fees, and any potential conflict of interest that might apply to your investments.
Now, back to the difference between fee-only and fee-based.
Fee-only advisors earn money through the fees you pay them, which is often based on a percentage of the assets you have under management. They may also charge a flat fee or even an hourly rate.
Fee-based advisors make money through client fees, but may also charge commissions or brokerage fees for certain kinds of products.
When deciding which option is right for you, you may also want to look at other options that are free from the commissions, management fees, and annual charges that often come with an advisor.
However, for fully customized advice, you’ll want to choose either a private wealth management company or a financial advisor.
Let’s take a deeper dive into what each offers you.
A wealth management advisor provides consulting services. They are typically hired by financial institutions and are well attuned to clients with a greater amount of wealth. They can also work as freelancers or entrepreneurs and customize their services to fit their clients.
Not surprisingly, wealth management advisors provide information and recommendations for investments in the markets their clients are interested in. They also inform their customers about taxes and other relevant financial information.
In many cases, they also work with accountants and lawyers to provide a holistic financial recommendation or plan for their clients which may include estate planning concepts and ideas.
If you want a wide array of financial services and your portfolio is well established, then a wealth management advisor might be the right choice.
Wondering what the difference is between wealth management vs financial advisor services? Consider the following.
In contrast with a wealth manager, a financial advisor is an expert who helps their clients with a wide array of financial services. Their specialty is typically in the financial planning and investment management arenas.
There are multiple types of financial advisors, and they aren’t married to a specific genre or set of services.
For example, a certified public accountant (CPA) holds a certification to work with both accounting and taxes. Another example is a chartered life underwriter (CLU) who provides information and recommendations for life insurance and estate planning.
In most instances, a financial advisor lends their specific knowledge and expertise to develop personalized financial plans to help their clients achieve financial goals. Those goals may include savings, budgets, insurance, or tax planning.
Financial advisors also help their clients regularly re-evaluate their situation to create the best path forward.
A wealth manager is a niche component of financial advising, generally with broader and deeper knowledge of the problems most often associated with higher net worth households. They assist in managing the assets of high-earners. They help connect their clients with every service and financial product they need to maximize their financial situation. In most cases, they provide a holistic view of your assets. Whether you need assistance with your retirement fund or real estate investments, tax or estate planning, they have your back.
A wealth management advisor provides custom financial solutions. They work one-on-one with you to understand your situation.
While you may be convinced that private wealth management is only for the uber-rich, people of any financial standing can use their services. They can provide one-off advice, solutions, or service that are surprisingly reasonable in cost.
So, is a wealth management advisor the right choice for your financial situation?
The answer is up to you.
However, wealth managers provide services that financial advisors cannot and often do not provide. They should help you navigate investing concerns and financial hurdles. More complex concepts should be made simpler and more understandable when working with a wealth advisor. They also provide long-term support for your financial goals & future plans.
If you’re interested in exploring private wealth management services, we would be happy to discuss your needs and concerns. Reach out to us via our contact form to learn more about how we can help you build a strong financial future.
Before defining the amount of money needed to hire a wealth manager, it is helpful to highlight some differences between a wealth manager and other types of financial advisors including financial planners, brokers, and traditional financial advisors. Financial planners, financial advisors, and wealth managers all provide financial advice to clients including investment advice, but frequently the lines defining the differences are blurry and indistinct. How do you decipher who does what?
One significant distinction between a wealth manager and a traditional financial advisor is that wealth managers generally serve substantially higher net worth households (often called ultra-high net worth/UHNW). Wealth manager advice delves deeply into estate taxes, income taxes, generational planning/trusts, and charitable planning in addition to the traditional investment planning. UHNW clients generally require significantly more assistance in these complex areas versus the larger group of middle class (sometimes called “mass affluent”) and high net worth investors (HNW). A simplistic definition of these groups is $10million of net worth or greater is considered UHNW. HNW would be $5 – 10million of net worth, and mass affluent may be defined as $1million to $5million. These definitions are clearly oversimplified and additional factors including future expected growth/savings, client age, business ownership, expected inheritance, and other factors will affect the planning an individual or family may require.
Many regular financial advisors will call themselves “wealth managers” or “wealth advisors”, but a second key distinction is educational credentialling and expertise. Most regular financial advisors do not have the expert qualifications and experience needed to address complex client needs. True “wealth advisors” will have extensive credentials and experience including degrees and industry certifications like CPA, CFP, JD, CIMA, and others.
Financial Advisors and Wealth Advisors may be compensated in flat fees or a percentage of the asset value of the portfolio under management. A typical range for an annual percentage fee would be between 0.25% and 1.0% of invested assets. The percentage charged is generally CHEAPER as the assets under management get LARGER. Thus, Wealth Advisors, who generally manage larger client households, may actually charge a lower percentage fee than regular financial advisors working with smaller client households.
Financial advisors may also be paid in commissions on the brokerage of the assets they buy for you. How much commission varies based upon the investment being purchased and this tends to shift more compensation to the beginning of a relationship (with less reasons for follow up service after the sale). Wealth managers are less likely to use a commission based fee model, and significantly more likely to be fee based, or fee only.
Financial Advisors help people budget, save, and allocate assets. Services often include lifestyle planning, college savings planning, and retirement planning.
A Financial Planner is a subset of financial advisors whose typical clientele is middle-class or upper-middle-class employees, and a written financial plan is one primary output of their work.
Wealth Managers are a subset of financial advisors who provide services to high-net-worth or ultra-high-net-worth individuals. Their services encompass risk management, capital gains planning, estate planning, alternative investment planning, philanthropic planning and other financial strategies pertinent to the wealthy.
Whereas a financial planner may just give advice, a wealth manager may actively manage client assets with a fiduciary responsibility back to the client.
If you are a middle-class or upper-middle-class investor/family/employee, a financial planner is a logical solution. A true wealth manager is probably not required (and may cost you more).
If you are a high-net-worth (i.e. wealthy) individual/family/business owner, consider the specific services required in your situation. When your needs include more complicated areas that require additional expertise, then a wealth manager will be a logical conclusion. Be sure the wealth manager’s credentials and experience match up well with your needs.
Financial advisors provide expert advice on money management, lifestyle planning, and retirement accumulation/distribution planning — spheres of knowledge that employees or business owners don’t necessarily acquire in school or on the job.
Financial advisors are educated and adhere to rigorous ethical standards. Many have fiduciary responsibility to you — an ethical obligation to put your wishes and best interests above your own.
You can tell your financial advisor your age, income, net worth, family status, desired retirement age, and financial status. The financial advisor uses this data to create a strategy to achieve those goals, as well as recommend assets to execute the strategy.
Most financial planners accept clients with a minimum of $100,000 investable dollars to put under management. Some will accept $50,000 or lower, but $100,000 is a good benchmark. For people with fewer assets, a Roboadvisor based on a computer algorithm may suffice and provide basic investment advice.
Wealth managers have higher minimums. How high depends on the wealth manager, their experience, and the demand for their services. It could be $500,000, $1 million, or even more. Wealth Managers with the highest demand frequently require $2mm -- $5mm minimums (or more) as their time is limited and top shelf service is demanded by their HNW and UHNW client households. In addition to these higher minimums, top Wealth Managers may also limit the number of client households they serve.
You can do much of what a financial advisor does with the help of inexpensive online tools. However, computer algorithms can’t account for all variables that an experienced financial advisor will consider. Nor can Google searches substitute for really “doing your homework” on an investment or an asset allocation before you implement it.
If you don’t have the time or the expertise to really understand what you are investing in and why -- in other words, the things financial advisors train for and practice every day — you are probably better off trusting the care and expertise of an experienced financial advisor. People outside of the finance world often report better returns after working with financial advisers vs. when they tried investing on their own, even after factoring in all fees associated with the financial advisor.
Not only do you not need a financial advisor for your 401(k), you may have trouble getting one involved even if you wanted one. By law, employer 401(k)s can only be managed by financial advisors with fiduciary responsibility to their clients, and not every financial planner does.
Further, it can be hard for financial planners to legally take a commission from managing a client’s 401(k) funds. For this reason, employees are less likely to obtain advice and more infrequently change their 401(k) investment strategies (even if they would be better off by doing so).
You know you need a financial advisor if:
You don’t need a financial planner to plan for your retirement, but their expertise can be invaluable. A good financial planner can look at your current situation and your retirement goals, and map out an actionable plan to achieve the best possible lifestyle for your retirement.
For many people, retirement is a personal and sensitive subject. Your financial planner can be a neutral party who tells it like it is and helps you set realistic goals.
The average wealth manager’s salary in the US is currently just under $95,000. The lower 25th percentile earns approximately $50,000, while the upper 75th percentile earns around $100,000. Top-performing wealth managers earn in excess of $250,000 annually.
A wealth manager takes the assets of a high-net-worth or ultra-high-net-worth individual, family, or entity under his/her direct management. (S)he has the power to make investment decisions on behalf of the client, with a fiduciary responsibility to the client.
The wealth manager executes a strategy agreed upon with the client with respect to:
Wealth managers typically work with individuals, families, and entities who have a higher-than-average net worth. The barrier to entry will vary from one wealth manager to another. It could be as low as $250,000, or as high as $1 million and beyond.
There is no one way to become a wealth manager — different firms have different requirements. A candidate will usually require at least a bachelor’s degree, plus relevant certifications like CFP (Certified Financial Planner) and/or CFW (Chartered Wealth Manager). Advanced certifications in business and accounting can’t hurt either.
Wealth management is the upper echelon of financial planning. Candidates must have excellent social skills, business savvy, and a global perspective to keep up with the fast-paced world of the wealthy.
Wealth managers help wealthy and ultra-wealthy clients balance growth strategies with risk management and tax planning to build and preserve their wealth. This could involve:
Thank you for reading so many nuanced thoughts about differences between a wealth manager and a financial advisor. We hope the information proves useful.
