It’s evident that the financial advice business has evolved over the years. The industry continues to mature, and financial advisors are always finding ways to address and meet the demands of today’s investors.
CNBC FA 100 recognizes those advisory firms that continue to find ways to work closely with clients to help them mitigate risk and meet their financial goals.
To be sure, financial advisory firms face a great deal of competition, which makes it even more important for firms to focus on growing their client base. To remain competitive, financial advisory firms continue to develop strategies to consistently deliver a great client experience. From developing creative client segmentation practices to intergenerational engagement, which helps advisors serve their client’s children, savvy advisory firms are always looking to find client-focused strategies.
That’s good news for today’s investor who may be considering some professional financial guidance.
More from Financial Advisor 100:
CNBC FA 100 2019 list of top-rated financial advisory firms
What inspired these top advisors to help others manage money
10 years on, ‘personal touch’ will still dominate financial advice space
You may be at the point in your life where you have started to accumulate a decent amount of money in a qualified retirement plan. Or, maybe your life has become a bit more complicated. As we get older, of course, the more complicated our financial lives become. Perhaps you are getting married, starting a family or looking to buy a home or you received an inheritance.
You’ll want to work with someone you can relate to and connect with, someone who understands you and is concerned about you and your life and money issues. A financial advisor can help you make sense of all of these issues. Financial advisors can holistically examine your financial situation and help you craft a plan to ensure you make decisions that are in line with your personal financial goals.
Finding that right advisor to help with your financial needs and goals can be complicated. There are so many variables to consider.
Many advisors may use a high assets under management metric as a selling point when marketing themselves to potential investors. However, AUM isn’t the whole story when a potential client is determining which financial advisory firm is right for them.
The CNBC FA 100 ranking takes into consideration a variety of key factors beyond AUM. The ranking is based on a proprietary methodology developed by CNBC in partnership with data provider AccuPoint Solutions. (See methodology box below.)
The goal in creating this list was to provide investors a ranking of advisory firms that offer comprehensive financial planning and services to their clients. Since developing and managing portfolios has become commoditized, the smart advisory firms know they must provide a wide variety of personal financial planning services to clients.
These firms help their clients by creating customized strategies to mitigate financial risk and build wealth over the long term. They can provide a client with a tailored game plan that puts them on track to achieve their specific financial goals.
While the role of financial advisors vary, their assistance can be very helpful when it comes to investing, retirement planning, tax information and creating a financial game plan.
There are many types of financial advisors and their professional expertise differs across the board. When considering working with a financial advisor, there are some things to consider.
At the beginning of the process, you should think about what type of financial advisor you want to meet with: fee-based or commission-based. Think about what you’re looking for. Are you looking for help with investments and retirement planning, or simply want someone to go to when you have money questions? Some advisors include financial planning in their fees for managing your investments, while others charge a separate fee or hourly rate for advice. Be sure to check that out.
Knowing what you’re looking for in a financial advisor is the first step to finding the right advisor for you. Knowing how to match an advisor to your needs is the second step. Ask any potential financial advisors these questions:
- What services do you provide?
- What type of clients do you typically work with?
- How will we communicate with each other? How often will I hear from you?
- Are you a fiduciary?
- How are you compensated? And how much will I be charged for your services?
Some advisors include financial planning in their fees for managing your investments, while others charge a separate fee for advice. As for how much you’ll pay, it will vary depending on where you live and the scope of the work you’re asking for.
It’s been widely reported that many people spend more time planning their summer vacation than they do thinking about their financial situation. That’s alarming, when you consider the key role money plays in your life. What can be more important than buying that first house, putting your kids through college or planning for your retirement?
It’s clear that investors today need some financial assistance. However, before you hire any financial professional, you should always do your due diligence and make sure you are working with someone you trust with your hard-earned money.
FA 100 Methodology
CNBC enlisted data provider AccuPoint Solutions to assist with delivering the CNBC FA 100 ranking of registered investment advisors.
The methodology consisted of first analyzing a variety of core data points from AccuPoint’s database of financial services firms. This analysis started with an initial list of 35,511 RIA firms.
AccuPoint then applied weighted categories to further refine and rank the firms, ultimately creating the list of the top 100.
The primary data points used in the analysis were reviewed, either as a minimum baseline or within a range, eliminating those firms that did not meet our requirements. Once the initial list was compiled, weightings were also applied accordingly. These data points included:
• Number of years in the business
• Number of employees
• Number of investment advisors registered with the firm
• The ratio of investment advisors to total number of employees
• Total assets under management
• Percentage of discretionary assets under management
• Total accounts under management
• Number of states where the RIA is registered
• Country of domicile