Money managers, like many professionals, may specialize in different areas. They may specialize in retirement assets for current income, focus on long-term growth portfolios or other strategies. Before hiring a money manager to help you review the following criteria.
Knowledge and Focus: The person you choose must be knowledgeable and stay educated on current federal and state income tax rates and rules as well as new and existing products available and money management strategies. They must be able to provide you with a written plan including appropriate strategies and recommendations. It can also be very helpful if they understand and can provide you with a written “Monte Carlo” projection. This can help to better assure your goals and needs will be met.
Education: What is their educational background regarding the area you are hiring them for assistance in? And, what designations do they hold regarding this training? For example, do they hold the CFP®, CRPC, CIMA, MFS, or other appropriate designations? They should have specific training to be able to effectively evaluate different options, make appropriate recommendations and communicate them to you clearly and in a way that you can understand.
Experience: How many years have they been working specifically in the area you need? What percentage of their current clients have similar goals as yours? This will help you to feel comfortable that this is truly an area they focus on. I relate this to the fact that may be better to work with an estate planning attorney for the work you need regarding wills and trusts rather than seeing a divorce attorney who also happens to handle wills and trusts.
The plan: Request to see a sample completed report that is in line with what you can expect from them. This can help assure you will be comfortable and be able to understand what you will be receiving from your adviser.
Other professionals: Your money manager should be willing and able to work with you, your tax advisor and attorney to help you implement a coordinated plan that is in line with the recommendations of your other professionals.
Important: Be sure your personalities “click”. Just like with your doctor and other professionals, you need to feel that your money manager is easy to talk to and really knows you, understands your needs and has your best interest in mind at all times. Getting a referral from someone you trust that has worked with this advisor in a similar capacity, can be very helpful as well.