What do you expect from a wealth advisor? Certainly, he or she must be able to create a financial plan, manage your portfolio, and provide thoughtful advice on taxes, cash flows and other fundamentals.

But the right wealth advisor can also help you grapple with important, less tangible matters, which may highlight a more strategic approach to managing your wealth. Asking the following questions can help you determine if a particular wealth advisor is a good fit for you.

1. Are my heirs properly prepared to inherit my wealth?

It’s common to think about wealth transfer as something that won’t be a concern until the distant future. But let’s be honest—we can’t even predict what will happen tomorrow. When your time comes, as it must for everyone, will your heirs be ready?


Suppose, for example, that you have young children. Clearly, it’s unrealistic to expect them to manage an inheritance. Or maybe your spouse leaves the financial decisions to you, and lacks the knowledge or inclination to handle wealth wisely. If you die unexpectedly, he or she will suddenly be forced to deal with financial issues, on top of coping with grief. And if you leave feuding beneficiaries behind, there may be issues of governance.

A top-shelf wealth advisor will anticipate concerns like these and plan for them in advance. He or she will set up a process that ensures that your finances are properly managed to help achieve your stated objectives, and that wealth transfer will take place smoothly.

2. How should I think about the performance of my investments?

The simplest benchmark for judging portfolio performance is rate of return, and there are situations in which that is an appropriate measure. But is it right for you?

At some point, many successful people accumulate enough wealth so that returns begin to matter less than protecting what they already have. In these cases, a risk mitigation and capital preservation strategy can be an appropriate choice.

Here’s a good test: Which would you lose more sleep over: a smaller than expected return or a greater than expected loss? Which would have a greater impact on your lifestyle and financial goals? Naturally, everybody wants a great return. However, according to research, many people suffer from “hyper loss aversion” and are up to five times more disturbed by losses than they are pleased with gains. Since every investment choice is a balance between risk and return, risk mitigation may be more important to you than growth of capital.


Your wealth advisor can help you establish the proper strategy and use performance measures that reflect that approach.

3. Where will you be in 30 years?

Of course, you’d like any professional relationship to last forever. With a wealth advisor, it’s especially important. After all, many financial decisions are based on life events that may not happen for decades. Other decisions may actually cross generations—something that doesn’t happen with, say, a doctor.

Now picture a prototypical wealth advisor. How old is he or she? Chances are, you’re thinking about a person in their 50s or 60s, which makes sense. You want someone with experience and a proven track record. But you also want someone with a succession plan in place. Who will be handling your account when your advisor retires? It’s a reasonable question to ask, and one that a wise wealth advisor will have considered.

The right wealth advisor is a confidante you can count on to help you make your most fundamental financial decisions. When choosing an advisor, it pays to think in ways that go well beyond your investment portfolio.

Scott J. Franklin and Craig R. DeMaio are Financial Advisors with the Wealth Management division of Morgan Stanley in New York City, New York.  The views expressed herein are those of the author and may not necessarily reflect the views of Morgan Stanley Smith Barney LLC, Member SIPC (www.sipc.org). Morgan Stanley Financial Advisors engage Worth to feature this article. Scott J. Franklin and Craig R. DeMaio may only transact business in states where they are registered or excluded or exempted from registration (https://advisor.morganstanley.com/1290-discovery-group). Transacting business, follow-up and individualized responses involving either effecting or attempting to effect transactions in securities, or the rendering of personalized investment advice for compensation, will not be made to persons in states where Scott J. Franklin and Craig R. DeMaio are not registered or excluded or exempt from registration. 
Morgan Stanley Smith Barney LLC (“Morgan Stanley”), its affiliates and Morgan Stanley Financial Advisors or Private Wealth
Advisors do not provide tax or legal advice. 
Clients should consult their tax advisor for matters involving taxation and tax planning and their attorney for matters involving trust and estate planning and other legal matters.

Morgan Stanley Smith Barney LLC. Member SIPC.
(CRC # 2930256, February 7, 2020)