Traverse City, Michigan is a booming retirement community. The area offers an array of high-end wineries, craft breweries, local restaurants, clean beaches, nature trails, boutique shops and crystal-clear fresh water that is ideal for sailing. It’s no wonder why Northern Michigan attracts newly retired individuals from all over to country. When these retirees move to Traverse City, they may decide that they want to start new professional relationships, such as finding a local trust & estate planning attorney, personal banker, or a financial planner. The area is home to many different types of professional institutions of all sizes and specialties. From the Wall Street wire houses to the small boutique firms, how does one choose the firm best for their situation?
How to choose a Traverse City financial planner. To figure out which financial planning firm is best for you, start with asking yourself what you would enjoy working with a financial planner. Are you looking for cutting edge technology to simplify your entire financial picture? Maybe you would enjoy delegating your wealth management instead of spending your free time planning and researching. You might be looking for a boutique firm instead of a big box institution because you value the higher level of personal attention and service. Maybe you are looking for a more customized solution that is tailored to your exact situation instead of settling for a cookie cutter approach. Whatever is most important to you, be sure to write it down before researching and interviewing potential planners. This will help keep you stay focused on the qualities that are most important to you and will help weed out those who wouldn’t be a solid fit.
What is most important to you? When prospective HNW clients interview our firm, we always spend a good amount of time determining exactly what they are looking for with their planning and investment strategies before offering them anything. It’s important to our firm that we enroll only our ideal clients, and those who we are 100% confident that we can serve and get results for. Through our experiences working with high-net-worth individuals and families, we have noticed that taking a holistic approach is most important to them. They are looking to build a long-term, deep relationship with a financial planner and cover all aspect of their financial picture instead of just focusing on investments or insurance alone. Coordinating their entire financial picture and making the complex simple is very important to them.
Understanding how your financial planner is compensated. It’s very important to understand how you are paying your financial planner. Transparency is extremely important to a maintaining a strong working relationship. Be sure to cover this on the front end before establishing a new relationship. Typically, HNW financial planners are compensated by a percentage of assets under management (0.5% – 1% is common) or a flat fee which varies depending on the amount of services provided. Cheaper is not always better, but neither is overpaying for poor services. We would suggest focusing on working with a fiduciary planner, this way your know that they are legally obligated to act in your best interest at all times.
Choosing the right investment strategy. We cannot stress how important this is for your success. Determining the proper blend of investments according to your risk tolerance, time horizon and financial goals is key. To make this a bit easier, a good financial planner will take you through a risk tolerance questionnaire before recommending any strategies. Usually, this questionnaire is 10-15 questions or so which gives us planners a very good understanding of what is best for your situation. You always want to be sure that your investments are within your comfort level of risk, but also will appreciate enough to help reach your financial goals. There are many types of financial products on the marketplace including mutual funds, exchange traded funds, stocks, bonds, annuities, hedge funds and more. The allocation of these will be dependent on your specific situation, but we would recommend that you fully understand each before committing to any strategy. Don’t hesitate to ask a bunch of questions, it’s okay to feel like you are asking too many! Our firm has found that exchange traded funds are preferred among our clients. These funds are similar to the traditional mutual funds, only they tend to be more tax efficient, flexible and more cost-efficient.
Technology will simplify your financial situation. Ask your potential financial planner what kind of financial technology they provide to their clients. Our HNW private clients really enjoy our holistic financial planning tool, eMoney. This program allows our clients to aggregate all of their financial accounts and track their wealth very easily. We can run retirement projections, cash flow reports, insurance illustrations and much more all from one platform and can can make changes to their big picture plan with just a few clicks of a button. We can send you a demo of our planning tool if you want to see it in action for yourself.
Meet regularly with your financial planner. We advise our clients to meet with us every six months to review their financial situation. Some of our clients are on a quarterly review schedule. Ask your potential advisor how often they plan on meeting with you. Your meetings don’t always have to be in person as technology allows us to host meetings remotely. If you are on an annual schedule, be sure to keep your financial planner updated in between meetings as things change so that they can give you the very best results and prevent potential pitfalls.
The bottom line. Be sure to thoroughly vet your prospective advisors before hiring. Ask all of the nosy questions (multiple times in different ways) to be sure they are the very best fit and trustworthy. It’s important to be sure you simply enjoy spending time with this individual as you will be spending a significant amount of time with them into the future. If you couldn’t picture hanging out with them outside of the office over a glass of wine, they probably aren’t a good fit.
Want to interview MICAPITAL as your new financial planner? Schedule a time to speak with Trent Grzegorczyk by going to micapitaladvisors.com/talk
MICAPITAL is a boutique private wealth planning firm specializing in serving an exclusive group of affluent and HNW individuals and families.