Finding the Right Advisor for Your Family

For families of wealth interested in maintaining a successful legacy across multiple generations, choosing the right wealth advisor to aid in this journey is a crucial decision. To get this decision right requires families to first look internally to understand their existing strengths, weaknesses, and what matters most, before looking externally for the right advisors to partner with. As with most decisions in life, this process is less about finding the ‘best’ option, and more about finding the ‘right’ option for you, which is a salient distinction that is important to understand at the outset of one’s search. But what characteristics should one seek to evaluate in an advisor to increase the odds that they will be the right match for their family?

Kathy Lintz and Ned Rollhaus, with Matter Family Office, discuss this in Tom McCullough and Keith Whitaker’s book, Wealth of Wisdom: Top Practices for Wealthy Families and Their Advisors. They suggest there are six primary characteristics of an advisor that a family would want to fully understand before deciding whether or not to work with them.

1. Culture: In the wealth advisory field, culture is everything. It permeates through all areas impacting the quality of service and advice a family will receive. Recruiting and retaining top talent, fostering innovation, collaborative problem solving and conflict management, are all deeply rooted in firm culture, and are all vital elements of an effective advisor-client partnership.
2. People and Resources: People are the lifeblood of any professional services business, and this is no different for wealth advisory firms. To gain insight into how well an advisory firm will take care of your family, look first to how well they attract and retain their most valuable resource – their people.
3. Alignment: Alignment entails the extent to which an advisor and client are working towards the same goal, which in this context, encompasses placing a family’s best interests above all else. Where misalignment often occurs is when there are conflicting objectives, such as fee structures which reward pushing products, accountability to firm owners who are far removed from the family-advisor relationship, firm prioritization of growing their client base versus serving existing clients, or an outsized emphasis on positioning the firm for future sale.
4. Scope of Services: The scope of services an advisor may have to offer can vary. It is important for a family to think critically about which services are most important to them, prioritize these needs, and use this as a guide to evaluate and match with the right advisor, or team of advisors.
5. Fee Structure: While it may seem obvious for a family to consider the ‘level’ of fees an advisor charges, it is equally important to understand ‘how’ fees are being charged. In addition to providing important insights about the characteristics described previously, understanding how fees are being charged will help families uncover how advisor behaviours may be motivated by financial compensation as opposed to the family’s best interests.
6. Typical Family Profile: Partnering with an advisor who serves clients similar to your family, in terms of both level of wealth and degree of financial complexity, has tangible benefits. This leads to an advisor having greater focus in their practice, which allows them to add value more quickly because they are more likely to have seen your situation (or at least one similar to it) before with other clients they serve.

A last point to highlight, based on my own experience partnering with families, is the importance of a family’s engagement in building and nurturing the advisor-client relationship. Engagement is most certainly a two-way street, and when both sides are actively engaged in the partnership, the outcomes can be remarkable. For families, this may entail things that sound obvious, such as reading materials and documents provided to you, responding to information requests in a reasonable time frame, and asking questions (there are no “dumb” questions). It may also entail things that may sound less obvious, such as being curious, trusting your instincts, or challenging your advisor when something does not feel right. Overall, being engaged with your advisor can go a long way, transforming what may start as an ordinary professional relationship into an extraordinary true long-term partnership.