Review of "Wealth Management Unwrapped"

A New Book Offers an Engaging View of the Advisor/Client Relationship

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A new take on wealth management. Photo credit: Robert Daly, OJO Images (c) Getty

Books about financial planning vary mostly in how they are written. The advice is usually pretty standard, rarely do published books offer downright terrible advice. For me, a good financial advice book generally depends on the approach. Is it engaging, interesting, thought-provoking? Do I like the writer's voice and want to keep hearing more from him or her? Although it's about finance, is it also a good read?

 

In the case of the book Wealth Management Unwrapped: Unwrap What You Need to Know and Enjoy the Present by Charlotte B. Beyer, the answers are yes, yes and yes. The book offers a completely unique take on working with a professional advisor or wealth manager. There are lots of charts and graphs to help get you thinking, and plenty of advice to keep you from making the most common mistakes. 

The fresh approach begins with the chapter titles, which include things like "If You Don't Know Where You're Going, Any Investment Will Get You There," "If You Don't Know Who the Sucker Is at the Conference Room Table, It May Be You!," and "Transparency, or How I Learned to Love Conflicts of Interest." 

Then there are the real-life conversations and sentiments that the author weaves into the book, beginning in Chapter 1: "Who's in Charge of My Wealth?" She includes a conversation overheard years ago on an online investing forum.

The first person asks if anyone had ever heard of Bernie Madoff. The second person says they love him, the returns are fantastic and they are happy. A third person chimes in to say that while the returns look good, her firm wasn't comfortable with the success and had to take a pass. That third person was Beyer herself, and the first investor contacted her years later to thank her for the warning.

It's a great story to illustrate the point if it sounds too good to be true, it probably is. 

There are worksheets and exercises included in the book that readers are supposed to complete and bring to a financial advisor. (Readers who enjoy infographics will get a kick out of some of Beyer's illustrations.) One exercise involves the five Ps: people, philosophy, process, performance and "phees." Your job is to write down the percentage of importance for each. It can give you a sense in the type of professional you prefer to work with. You are uncovering more about yourself as an advisory client. 

Beyer outlines what it means to judge investment performance. There's return, but you must also consider inflation, advisor fees, mutual fund or investment fees, and so on. (As she puts in in the book: Returns minus inflation minus fees = less than you'd like.) She recommends that you make your advisor do this math with them before signing on as a client. What's the inflation forecast? What exactly am I paying you? How about the underlying investments? Just doing this exercise will help you better get to know your advisor and how she handles good news as well as bad. 

But if that's not enough, Beyer provides and interview score sheet to use when you interview.

She explains in detail the types of conflicts of interest investors might encounter and what they mean. 

(One beef I personally had in the book was in the chapter about transparency. She warns against trusting a list of top brokers or financial advisors because you don't know the hidden conflicts of interest because of advertising dollars or pay to play. I generally agree that you can't trust a third party without conducting other research. However, as a journalist who worked on a best advisors list, I can say there was no inherent conflict of interest involved and we worked to provide the best list for readers.)

But the book does include a lot of good advice on how to properly judge a financial advisor for yourself. How to know when your expectations are unrealistic when you are being unfair.

There's a callout that's all about what investors never say to advisors and what advisors never say to investors, and the sentiments are meaningful. The book could help open the lines of communication between advisors and their clients. And if you are interested in a new advisor/client relationship, the five final tips and five treacherous traps that you must read before signing is something you can clip out and take with you in your wallet. There's even advice on how to end a relationship with an advisor.

If you or a friend are considering a new relationship with a financial professional -- or even if you just want to know what it's like to work with an advisor -- Wealth Management Unwrapped is a handy book to have. 

Read another book review: A Good Financial Advisor Will Tell You