Questions to Ask a California Wealth Manager

Fiduciary on what, exactly

"Are you a fiduciary" is the standard question, and it produces a yes from nearly everyone. The more useful version adds two words: on what, exactly.

Investment advisers are subject to applicable fiduciary obligations when providing investment advisory services. Insurance and annuity transactions are also subject to state insurance laws and standards of conduct. When an insurance recommendation is made in connection with an investment advisory relationship, additional fiduciary and conflict-of-interest considerations may apply. A firm can be entirely honest in saying yes and still be describing only part of what it does for you. Fiduciary or broker in California covers where each framework applies.

So ask it service by service. Investment management, financial planning, insurance placement, annuity recommendations. The answers may differ, and a firm that explains the difference without hesitating is giving you a useful signal.

Who holds the assets

This is the question most interview lists skip, and it is the one with the clearest answer.

In a conventional arrangement, your assets sit at a third-party custodian, a firm such as Schwab or Fidelity, and the adviser has authority to manage but not to take possession. Holding client assets with an independent qualified custodian and receiving statements directly from that custodian are important investor protections. Clients should understand who holds their assets, what authority their adviser has over those accounts, and whether the adviser has custody under applicable regulations. Certain withdrawal authorities and other arrangements can create regulatory custody even where a third-party custodian holds the assets.

Ask who the custodian is, whether you will receive statements directly from them, and whether the firm has custody of client assets in any form. That last point is disclosed in Form ADV.

How the firm is paid

Four questions get further than any single one.

• How are you paid for each service you provide, itemised rather than as one headline figure?
• Does anyone other than me pay you anything in connection with my account?
• Do you or an affiliate earn commissions on anything you might recommend to me?
• What would my total cost be in the first year, in dollars?

Form ADV Part 2A is where the answers can be checked: Item 5 for fees, Item 10 for affiliations, Item 14 for third-party compensation. How advisors are paid covers the three models and the conflicts inside each, and fee-only versus fee-based for California retirees covers what the labels do and do not tell you.

Who does the work

At some financial firms, the professional who initially meets with a prospective client may not be the person responsible for ongoing account management or financial planning. Prospective clients should ask who will provide each service and how responsibilities are assigned.

Ask who will build the plan, who you will meet with quarterly, and who answers the phone when something changes. Ask how many households the firm serves per adviser. The answers describe the service you will actually receive rather than the one described in the first meeting.

Tax and estate coordination

Most firms say they coordinate with your CPA and attorney. The useful follow-up is what that means in practice.

Does the firm produce a multi-year tax projection, or an annual summary? Does anyone speak to your tax professional before a Roth conversion, or after? Who checks whether account titling and beneficiary designations line up with the estate documents, and who reviews that work? Legal determinations and estate-planning documents should be handled by a qualified attorney, and tax returns and individualized tax determinations by appropriately qualified tax professionals. Financial advisers may help coordinate information and planning discussions among them, so the question is who owns the handoffs. Who handles trust funding in California sets out those roles, and the plan gap checklist covers what a complete plan addresses.

What happens next

Because financial advisory relationships may continue for many years, continuity is worth asking about directly.

Ask how the firm plans to maintain service continuity if an adviser retires, becomes unavailable, or sells the practice. A written succession or business-continuity arrangement can be an important consideration. At a firm built around one person the question carries more weight, and it applies to Avinci as much as to anyone else.

Planning in Westlake Village

Westlake Village straddles the Los Angeles and Ventura county line, a planned community developed from the 1960s around the lake, with a concentration of corporate campuses and regional headquarters along the 101 corridor.

That corporate presence shapes which questions matter most there. For households with executive compensation, deferred compensation or concentrated employer stock, coordination among investment, tax and legal professionals may help identify consequences that would not be apparent when each issue is considered separately: when equity vests, how a distribution election is taxed, what a concentrated position does to portfolio risk. For those clients the coordination question above is the one worth pressing. The county line is a practical detail worth raising with an estate attorney, since it can affect where recording or probate procedures occur.