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Wealth Management 101: Investing Guide for Millennials

For many young professionals and families, the term “wealth management” can seem confusing. After all, doesn’t the term imply that you must currently have wealth in order to manage it? Despite how it may sound, wealth management is simply the act of planning for your financial future. It’s never too early to start saving. At CS Bank, we’re dedicated to our community’s financial success. In this wealth management guide, we’ll explain how choosing the right wealth manager can make a big difference in your long-term financial health.

What does a wealth manager do?

Wealth managers offer guidance and make decisions according to your financial goals. No matter what your initial starting point, a financial advisor can benefit you as you accumulate wealth over the years. Investing in the stock market, purchasing insurance protection, opening or managing retirement accounts and college savings plans -- these are just some of the investment services that a wealth manager provides. A relationship with a wealth manager is personal and customized. As a client, you’ll explain your current financial situation and both your long and short term savings goals.

Why do I need a financial advisor?

The variety of investment opportunities available today is overwhelming. Deciding where to invest your savings requires knowledge of the options and the risks involved. To start a personalized recommendation, a financial advisor will help you determine your risk tolerance. Whether your investment profile is aggressive, moderate, or conservative depends on a number of lifestyle factors.
  • What’s your current age?
  • When do you plan to retire?
  •  Do you plan to hold your investments or actively buy & sell?
  • Are you willing to accept higher risk in order to gain a higher return?

Just because your overall preference is moderate doesn’t mean that you can’t have a few aggressive or conservative investments. A good wealth manager will help you determine the right mix of financial products to suit your needs.

Once you’ve made your initial investments, a financial advisor will handle the work of monitoring the daily trends of the stock market. They’ll also keep an eye on your asset allocation, the breakdown of how much money you have in each investment. By knowing your financial goals, a wealth manager will keep you on track and make appropriate financial decisions on your behalf.

How do I find a wealth manager?

There is no shortage of financial advisors in Arkansas or Missouri. The key to successful wealth management is finding the right advisor. Start by identifying friends and coworkers that have similar life situations to you. Look for people around the same age as you, whether or not they have children, and if they are a one or two income family. Then ask them if they use a financial advisor. Most people will be happy to share their experiences. If they have positive things to say, set up an interview with their referral.

Ask your current bank if they offer wealth management or financial advisor services. Many people find it convenient to keep their financial assets together in one place. Your community bank is a great resource for localized services. CS Bank offers wealth management and investment services with no minimum deposit required to open a wealth management account. Keep in mind that other institutions may require a minimum deposit or turn down your business if you aren’t investing a large sum.

How do I choose a financial advisor?

You have unique financial needs and goals. Be sure to interview several advisors to find one that’s right for you. Your advisor should be easy to communicate with, listen to your needs, and offer several recommendations for you to choose from. Keep in mind that not all financial advisors deal with specialty products such as estate planning and trusts. Be sure your advisor offers the products and services that you need. Do your research -- a wealth manager will make decisions that can affect your financial health.

How much does a wealth manager cost?

Fee structures can vary significantly between individuals and institutions. There are three basic types of advisors.

Commission-Based Advisors

Financial advisors that work on commission get paid for the products they sell. This can apply to a variety of financial instruments such as insurance plans and mutual funds. Most experts agree this fee structure may not be in your best interest. Rather than investing in the best products for the client, commission- based advisors may be choosing the products that pay the highest commissions.

Fee-Only Advisors

A fee-only advisor receives no commission from financial products. You will pay for their service as an hourly fee, yearly fee, or percentage of your managed assets. What type of fee you are willing to commit to paying should depend on the level of involvement you expect from your advisor. If you're just getting started, consider an advisor with an hourly rate who can help you develop a wealth management plan. As your wealth increases you may be willing to pay a percentage of your assets to an advisor that will spend time monitoring your investments and helping them grow.

Fee-Based Advisors

Sometimes a financial advisor makes money through both fees and commissions. In this case you are paying a flat fee for their services, and they may still be pushing certain products in order to earn a commission. If you choose an advisor that works on commission, be willing to do some research so you can confidently turn down product recommendations that you don’t want.

If you wish to forgo the expense of a financial advisor, there are ways to invest with zero fees. Consider an hour-long consultation with a wealth manager to create a financial game plan. Then take investing into your own hands through an investing app. These online platforms allow you to trade stocks with no fees or commission.

Talk to a Wealth Manager

To learn more about wealth management services, or to start an investment account, contact Joe McClung, LPL registered investment advisor at CS Bank’s investment division—CS Investment Services. We have a long history of providing local financial services to Northwest Arkansas and surrounding areas. It’s important to note that securities and insurance offered through LPL or its affiliates are not insured by FDIC or any other government agency, not guaranteed by the bank, and may lose value. Contact an experienced Investment Management professional at CS Bank Investment Services by calling 479-253-2265. or visiting one of our convenient locations. Our Financial Center is located in Eureka Springs. We look forward to helping you achieve your financial dreams!