At the heart of the Wealth Advisor Services® program is the relationship you build with your independent investment advisor firm. To help you better understand the role these firms can play in your financial plan, let's start by understanding how these firms are structured, the kinds of solutions they offer, and how you can work together.
Here are a few things to know about independent investment advisor firms:
Can advise clients on security selection or manage entire investment portfolios.
Can provide guidance on a range of financial issues, including financial planning, tax management, insurance, and estate planning.
Have a fiduciary obligation to their clients, meaning that they have a fundamental duty to provide investment advice that is in their clients’ best interests.
Typically earn their income through management fees, calculated as a percentage of a client’s assets under management.
How working with an independent investment advisor firm can be different
Because independent investment advisor firms tend to be smaller and more specialized, they can, in many cases, provide a more boutique set of services. Depending on where you live and the services you need, it may also be possible to connect you with a local firm so you can build an in-person relationship.
However, it's important to note that these firms generally do not custody client assets. So when you work with a firm through the Wealth Advisor Solutions® program, for the most part assets managed by that firm will remain custodied with Fidelity. This can give you a more comprehensive view of your overall portfolio while giving your Fidelity advisor the ability to provide continued planning support.
Choosing an independent investment advisor firm starts with a focus on your needs and preferences and how a firm may be able help meet them. Once we have an understanding of those needs and what you're looking for from the relationship, we’ll provide referrals, leaving the final decision on who to work with to you. Here are some things to consider as you make your decision:
- Does the firm provide services that match your needs? Can they grow with you as your needs evolve?
- Does the firm typically work with clients like you and do they have experience with the kinds of solutions you need?
- How does the firm's investment and planning point of view compare to your own? How have they historically responded during challenging market environments?
- Will you collaborate face to face? Over video? And how often can you expect to communicate?
- How will the firm help you measure your progress toward your goals?
- Do you have a clear understanding of what your fees will be and how you'll be charged?
- Do you feel confident in the financial health of the firm? How long have they been in business? Have they grown over time? And is there a leadership succession plan in place?
- Do you have a personal rapport? Are they asking questions about you or does the conversation feel like a sales pitch? Remember, this relationship should be about you and your needs.
Working with an independent investment advisor firm
Like any good relationship, working with an independent investment advisor firm will require some give and take. The more clearly everyone's expectations are communicated at the outset, the greater chances of success.
What you should expect from an independent investment advisor firm
- Defining success. Your firm should provide a clear definition of what success will look like.
- Ongoing reviews. These will help you understand how you're invested and how those investments are performing, while providing some insight into the firm's investment recommendations. These reviews should also give you an opportunity to ask questions. You should also expect periodic communications, such as a quarterly e-newsletter explaining the firm's current thinking.
- Proactive approach. A good independent investment advisor firm will reach out to discuss how events, like market turbulence, may be impacting your plan. If you reach out, the firm should be able to tell you how they're working to protect your assets.
- Stay current. Your firm should keep track of changes in your life and how those may impact your financial plan, anticipating and planning for changes that may affect your financial goals.
- Regular updates. Your firm should communicate how any change to your investment strategy may impact your plan, and whether those changes come with additional costs or change the kind of risk you're exposed to.
- Provide education. Your firm should, if you've expressed an interest, provide education. It's not enough to merely explain what's being done on your behalf but why it's being done.
How you can contribute to a successful relationship
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Open communication |
Commit to learning |
Be responsive |
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The quality of the plan your firm creates for you is dependent on their having a clear idea of your full financial picture, including needs, goals, and concerns, as well as a detailed view of your financial situation. |
Many independent investment advisor firms prefer engaged clients who are committed to building a familiarity with their financial plan. A willingness to develop an understanding about your plan will go a long way toward making your relationship successful. |
When someone from your firm reaches out, the issue at hand is often time sensitive and a prompt action is necessary to fully take advantage of an opportunity or to help manage risk. |
