Advertiser Disclosure

Best of

Best Business Checking Accounts

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It has not been previewed, commissioned or otherwise endorsed by any of our network partners.

Written By

Reviewed By

If you’re starting a business, one of the first steps to take is opening a business checking account. Being able to make transactions and deposit funds is an essential component of actually doing business, after all.

Every business owner will need different things from their checking account, based on factors like how many transactions you make per month and what kind of minimum balance you can manage. However, these are the basic business checking account features you need to look for:

  • Low transaction fees
  • Low minimum opening deposit and minimum balance requirements
  • High interest rates
  • Access to physical bank branches
  • Extensive ATM network

Since finding the right account can be a chore, we’ve compiled a round-up of the best business checking accounts that are currently available. Every month, we review business checking account rates using data from another LendingTree company, DepositAccounts.com, a database of offerings at more than 17,100 banks and credit unions. We sorted the products by APY, then eliminated institutions that were not available nationwide and did not meet the five criteria above.

To make the cut, the account needed to have minimal fees, a minimum of 50 transactions per month and the option to waive monthly fees if certain requirements are met. While offering an APY wasn’t a requirement, it was taken into consideration when developing this list.

Best Business Checking Accounts of July 2020

Account NameMinimum Balance to Waive Monthly Fee Number of Transactions Per Month with No ChargeAPY

Axos Bank Business Interest Checking

Average daily balance of $5,000

Up to 500.80%

Radius Bank Tailored Checking

Average monthly balance of $5,000

Unlimited0.10%

TIAA Bank Business Checking

Daily balance of $5,000

First 200 itemsNone

Chase Total Business Checking

Daily balance of $1,500

100None

First Citizens Bank Basic Business Checking

None, but must enroll in paperless statements

Up to 175 itemsNone

Capital One Spark Business Unlimited Checking

Prior 30- or 90-day average account balance of $25,000

UnlimitedNone

nbkc Bank Business Account

N/A

UnlimitedNone

Bank of America Business Advantage Checking

Average monthly balance of $15,000

500None

PNC Bank Business Checking

Average monthly collected balance of $500

Up to 150 transactionsNone

Axos Bank Business Interest Checking

Business Interest Checking

SEE DETAILS Secured

on Axos Bank’s secure website

Member FDIC

Axos Bank offers one of the few business checking accounts with minimal fees and a competitive APY, making it one of the best choices out there. Axos Bank’s Business Interest Checking account features an APY of 0.80% on account balances ranging from $0 to $5 million.

There is a $100 minimum required to open an account, and although the bank does charge a monthly maintenance fee of $10, you can waive the fee if you maintain a minimum average daily balance of $5,000. Other attractive features of the Axos Bank Business Interest Checking account are:

  • Transaction fees: Up to 50 items per month, $0.50 after that
  • Monthly fee: $10, can be we waived with minimum average daily balance of $5,000
  • ATM fees: Unlimited domestic reimbursements
  • Number of physical branches: Online only

Radius Bank Tailored Checking

Tailored Checking

SEE DETAILS Secured

on Radius Bank’s secure website

Member FDIC

Radius Bank is another online-only option that offers a great business checking account. Radius Bank’s Tailored Checking account features an APY of 0.10% on balances over $5,000. Like Axos, there is a $10 monthly maintenance fee, which can be waived if you maintain a minimum monthly balance of $5,000. There is a minimum deposit of $100 required to open an account, but no minimum balance requirement after that.

In addition to earning interest, other features of the Radius Bank Tailored Checking account worth noting are:

  • Transaction fees: Unlimited transactions
  • Monthly fee: $10, but can be waived with average monthly balance of $5,000
  • ATM fees: Unlimited ATM reimbursements, excluding international exchange fees)
  • Number of physical branches: One in Boston, otherwise it’s all online

TIAA Bank Business Checking

Small Business Checking - 1st Year Intro Rate

SEE DETAILS Secured

on TIAA Bank’s secure website

Member FDIC

TIAA Bank offers a number of business checking accounts, ranging from options geared specifically to small businesses, to others tailored for non-profits. The standard Business Checking account is a solid product that ticks a number of boxes for a great, low-fee account. It’s worth noting that there’s a minimum deposit of $1,500 required to open an account, relatively higher than other business checking accounts out there.

It’s worth noting that there’s a minimum deposit of $1,500 required to open an account, relatively higher than other business checking accounts out there. Other business checking accounts offered by TIAA Bank that are worth exploring, depending on your business’s needs, include the Small Business Checking account, which is made for sole proprietors and single owner LLCs and offers an intro APY of 0.40%, and the Business Analysis Checking account.

The TIAA Bank Business Checking account features the following:

  • Transaction fees: First 200 items per month, $0.25 each after that
  • Monthly fee: $14.95, but can be waived with balance of $5,000
  • ATM fees: $15 monthly ATM reimbursement (domestic)
  • Number of physical branches: 145

Chase Bank Total Business Checking

Chase Total Business Checking

SEE DETAILS Secured

on Chase Bank’s secure website

Member FDIC

Currently, Chase is offering a $300 bonus offer to new Chase business checking customers who open a Chase Total Business Checking account with qualifying activities.

Chase Bank’s Total Business Checking account offers the confidence that comes with banking with one of the largest banks in the U.S., with its extensive branch network and deep bench of deposit and lending products. Chase charges a $15 monthly service fee for this account, but there are ways you can waive it or reduce it, including maintaining a minimum daily balance of $1,500 or maintaining a linked Private Client or Sapphire Personal account.

Other standout features that come with the Chase Total Business Checking account include:

  • Transaction fees: 100 transactions per month, $0.40 each after that.
  • Monthly fee: $15, can be waived if you maintain a daily balance of at least $1,500 or maintain a Chase Private Client Checking account or a Sapphire Personal Checking account; reduced to $12 when you’re enrolled in paperless statements
  • ATM fees: No fee for out-of-network ATM withdrawals (ATM owner fees still apply)
  • Number of physical branches: Nearly 4,900

First Citizens Basic Business Checking

Basic Business Checking

SEE DETAILS Secured

on First Citizens Bank (NC)’s secure website

First Citizens Bank, which has a branch network sprawling across the Southeast and Southwest, and also offers online banking services. First Citizens promotes its Basic Business Checking account as a “favorite starter account” for businesses because of its simplicity and affordability. It’s one of the few banks on this list that doesn’t have any monthly maintenance fees, regardless of the account’s balance, as long as you opt out of paper statements.

With a low minimum deposit requirement of just $100 to open an account and no minimum balance requirements after that, it’s also one of the more accessible checking accounts for businesses that are not flush with cash from the get-go. While the First Citizens Basic Business Checking account doesn’t offer many bells and whistles, it’s a low-fee account with attractive features similar to those offered at big financial institutions:

  • Transaction fees: Up to 175 items per month, $0.50 each after that
  • Monthly fee: None
  • ATM fees: Free access to First Citizens Bank ATMs
  • Number of physical branches: Over 500 branches in Arizona, California, Colorado, Florida, Georgia, Kansas, Maryland, Missouri, New Mexico, North Carolina, Oklahoma, Oregon, Pennsylvania, South Carolina, Tennessee, Texas, Virginia, Washington, Wisconsin and West Virginia.

Capital One Spark Business Unlimited Checking

Spark Business Unlimited Checking

SEE DETAILS Secured

on Capital One’s secure website

The standout feature of Capital One’s Spark Business Unlimited Checking account is its unlimited transactions, a relatively rare feature for business checking accounts at the other big banks.

The Spark Business Unlimited Checking account requires a pretty hefty balance to waive the monthly service fee of $35. Capital One, however, does offer free overdraft protection with a linked small business deposit account. Other noteworthy features offered by the Capital One Spark Business Unlimited Checking account include:

  • Transaction fees: Unlimited transactions
  • Monthly fee: $35, can be waived with prior 30- or 90-day average account balance of $25,000
  • ATM fees: Free access to 39,000 Allpoint ATMs
  • Number of physical branches: More than 400

nbkc bank Business Account

Business Account

SEE DETAILS Secured

on nbkc bank’s secure website

Member FDIC

The nbkc bank Business Account is a no-frills business checking account with competitive incentives, including unlimited transactions. There is no minimum required to open an account, and with no minimum balance requirements, this is a checking account that’s especially accessible for businesses just starting out.

For those who want more from their nbkc bank Business Account services, the bank also offers add-on options for an additional cost, like the Desktop Deposit, which gives you unlimited deposits from your office and unlimited account support. Drawbacks of the nbkc bank Business account include only having a handful of physical bank branches in Kansas and Missouri. However, nbkc primarily presents itself as an online-only bank.

Other standout features of the nbkc bank Business account include:

  • Transaction fees: Unlimited transactions
  • Monthly fee: None
  • ATM fees: Free access to 32,000 MoneyPass ATMs and up to $12 monthly refunds for any ATM’s fees
  • Number of physical branches: 4 total in Kansas and Missouri (it positions itself as an online bank)

Bank of America Business Advantage Checking

 Business Advantage Checking

SEE DETAILS Secured

on Bank Of America’s secure website

Bank of America (BoA) offers a number of business checking accounts, but its Business Advantage Checking account in particular has a number of competitive features. This account does have a relatively steep monthly fee of $29.95, but it gives you several options to avoid that fee. There is a minimum deposit of $100 required to open the account.

One perk worth highlighting is that you’ll also receive an additional Business Advantage Checking account and an additional Business Advantage Savings account at no extra charge, as well as a $300 credit to new, eligible business credit cards if you make at least $3,000 in new purchases within the first 90 days.

Other standout features of the Bank of America Business Advantage Checking account include:

  • Transaction fees: Up to 500 transactions per month, $0.45 after that
  • Monthly fee: $29.95, which can be waived in several ways, including maintaining an average monthly balance of at least $15,000, maintaining a combined average monthly balance in linked BoA accounts of $35,000, or spending $2,500 in net new purchases on a BoA business credit card
  • ATM fees: Free access to Bank of America ATMs
  • Number of physical branches: Over 4,000

PNC Bank Business Checking

Business Checking Plus

SEE DETAILS Secured

on PNC Bank’s secure website

PNC Bank’s Business Checking account is great for budding businesses interested in the checking essentials with minimal fees. There is a minimum deposit of just $100 required to open an account, and the $10 monthly maintenance fee is waived by meeting certain requirements, including maintaining an average, monthly collected balance of just $500.

There are drawbacks of the PNC Bank Business Checking account, though. PNC itself has a relatively nonexistent footprint in the Western region of the U.S., so if you live in that region and want the convenience of a bank with brick-and-mortar locations, you’ll want to take that into consideration.

Other noteworthy features of the PNC Bank Business Checking account are:

  • Transaction fees: Up to 150 transactions monthly, $0.50 each after that
  • Monthly fee: $10, waived if you maintain a balance of $500, use a linked PNC business credit card to make a minimum of $500 in eligible purchases or Maintain a linked PNC Merchant Services account and generate a minimum of $500 in qualifying monthly processing deposits
  • ATM fees: Free access to 15,000 PNC ATMs, two reimbursements per statement cycle of non-PNC Bank ATM fees
  • Number of physical branches: 2,400 in Alabama, Delaware, Washington, DC, Florida, Georgia, Illinois, Indiana, Kansas, Kentucky, Maryland, Michigan, Missouri, New Jersey, New York, North Carolina, Ohio, Pennsylvania, South Carolina, Texas, Virginia, West Virginia and Wisconsin

Business checking accounts vs. personal checking accounts

At first glance, business checking accounts versus personal checking accounts might seem fairly similar. But if you take a closer look, you can understand the key differences. While every account has its differing features, personal checking accounts usually have:

Meanwhile, business checking accounts often have:

  • Monthly service fees or minimum balance requirements to waive them
  • Lower APYs
  • Extra fees for actions ranging from having an excess of transactions to depositing cash
  • More documentation required to open an account
  • The option to order employee debit cards

Why you need a business checking account

If you’re a business owner, you might be wondering why you even have to open a checking account separate from your personal one. After all, personal checking accounts tend to have lower fees, higher APYs and better features. Why not just skip opening one and — when it comes to your checking accounts — mix business with pleasure?

There are several reasons why you should keep your work and personal checking accounts from co-mingling. First and foremost: If you operate your business as a legal entity that is separate from you – say, as an LLC – you’re legally required to keep your personal and business finances separate. Opening a business checking account is the simplest way to do that.

Another reason why you need a checking account for your business is to protect yourself. If you have structured your business entity as a corporation or an LLC, and you have a separate checking account for your business, you and other shareholders’ personal assets are not likely to be seized for damages your company is obligated to pay when filing for bankruptcy.

Benefits of a business checking account

There are a number of other benefits associated with maintaining a business checking account, aside from the obvious ones of following the law and protecting your personal assets. Those benefits can include:

  • Keeping your business records organized. This will make it easier to track your business’s profitability and assess its performance.
  • Simplifying your taxes. By keeping your personal and business checking accounts separate, it will be easier for you to file your taxes accurately and avoid penalties from the IRS. Also, it will make it easier for you to deduct business expenses from your taxes.
  • Being able to accept credit cards as a form of payment, either by setting up a merchant system or credit acceptance system.
  • Being able to allow your employees to use the business checking account.

What you need to open a business checking account

When opening a business checking account, you need more than just a spiffy company name and logo. You’ll typically be required to present the following documents:

  • Employee Identification Number (or Social Security number if it’s a sole proprietorship)
  • Your business’s formation documents
  • Ownership agreements
  • Business license

Opening a business checking account might be one of the first, big business decisions you will make as an entrepreneur. Make sure it’s an informed decision: Do your research, come with questions and be confident about the account you are opening before signing on the dotted line.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

Advertiser Disclosure

News

Over 6 Million Households Make Less Than Proposed Universal Basic Income

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It has not been previewed, commissioned or otherwise endorsed by any of our network partners.

Written By

Reviewed By

As the coronavirus pandemic continues to pummel the U.S. economy, causing a heightened financial strain on U.S. households, the argument for a universal basic income (UBI) has been gaining traction.

In fact, legislation introduced in the House of Representatives in April 2020 proposes a UBI payment for up to 12 months in the wake of the coronavirus pandemic. The payments would consist of at least $2,000 a month for individuals age 16 or older who earn less than $130,000 a year, and $4,000 each month for married couples who earn less than $260,000 annually. The proposal also includes $500 per child for up to three children.

If the proposed UBI is intended to represent how much American households need to bring in to get by, a new study from MagnifyMoney reveals that the incomes of a stark number of U.S. households are falling significantly short of the proposed UBI amount. Using data from the U.S. Census, we calculated the total income of each household and counted those with total incomes below what they would receive from the proposed UBI. Here’s what we found.

Key findings

  • Our study reveals that 4.9% of American households currently have a lower income than the proposed UBI would provide. This comes to a total of 6,120,981 households nationwide.
  • Despite having the nation’s highest median income ($82,604 in 2018), 8.6% of households (26,762) in the District of Columbia bring in less income than they would receive under the proposed UBI. 
  • Mississippi follows closely behind, with the incomes of 8.3% of households — or 98,768 of households — falling under their UBI allotment.
  • In Louisiana, 127,889 — or 6.9% — of households would at least double their incomes if they were to receive the proposed UBI.
  • At the other end of the spectrum, only 2.7% of households in Minnesota  — or 62,800 — have incomes lower than what they would receive if the bill went into effect.
  • Washington state and North Dakota round out the bottom three, with only 2.8% and 3.1% of their households falling below the UBI mark, respectively.
  • Interestingly, the 10 states where the fewest households make less than UBI are in the northern half of the country. Seven of those states border Canada.
  • Nine of the states at the top of our list are below the Mason Dixon line, as well as the District of Columbia.
  • Surprisingly, states with higher median incomes still had pretty large populations of households with incomes under the proposed UBI: New York, California, Massachusetts, Connecticut and Illinois all have above average household incomes, but also have about 5% of households earning less than UBI.

U.S. households make less than the proposed UBI

Universal basic income policies have been floating around for decades, and are designed to act as a type of social security, guaranteeing a set amount of money to an entire governed population with no strings attached.

UBI can be a polarizing topic, largely among political party lines. However, if we assume that a proposed UBI represents the standard amount that an American household would need in order to survive, our study found that many Americans are making far, far less than this standard amount determined by elected officials in the most recent proposal.

Overall, our study found that 4.9% of households in the U.S. currently make a lower income than that of the proposed UBI — underscoring the vast swath of the American population that is earning less than what elected officials likely believe to be the standard amount of money needed to get by.

Our study also reveals a few pretty significant regional differences. The top 9 states, as well as the District of Columbia, had the largest percentages of households that make less than the proposed UBI and are all below the Mason Dixon line, suggesting that families in the South make far less per household than what governed officials deem to be enough to make ends meet.

Meanwhile, the states that had the lowest number of households that make less than the proposed UBI were primarily in the North, with seven of those states bordering Canada.

Interestingly, our study found that even states that had households earning higher incomes had large swaths of the population bringing in less than the proposed UBI amount — even when compared to other states. The District of Columbia, for example, boasts the highest median household income of $82,604, yet has the largest percentage of households (8.6%) making less than the proposed UBI. Meanwhile, the median household income in New York was above average (a solid $65,323 in 2018), but it was also one of the states in our study above average for households making less than the proposed UBI, at 5.1%. making less than the proposed UBI, despite its median income being slightly over the average for the U.S.

States with the highest percentage of households that make less than the proposed UBI

As noted previously, the top states with the largest swaths of population that make less than the proposed UBI are all located in the South. The District of Columbia tops the list with a whopping 8.6% of households falling short of the proposed UBI; following the nation’s capital is Mississippi, with 8.3% of households earning less than the proposed UBI, and Louisiana, with 6.9% of households earning less.

Alabama and Arkansas are next, both with 6.4% of households coming up short of the proposed UBI, and Georgia rounds out the top five, with 6.3% of households earning less. Kentucky and New Mexico follow suit, both with 6.2% of households making less than the proposed UBI, followed by West Virginia with 5.9% and South Carolina with 5.6%.

States with the lowest percentage of households that make less than the proposed UBI

Meanwhile, many northern states boast a small percentage of households that earn less than the proposed UBI. Our study found that the state in the best shape is Minnesota, with just 2.7% (or 62,800) households making less than the proposed UBI. Trailing Minnesota is Washington, with 2.8% of households making less than the proposed UBI; North Dakota and Maine with 3.1%; and Utah and Alaska with 3.3%.

Rounding out the 10 states with the lowest number of households that make less than the proposed UBI include Wyoming and Nebraska with 3.4%; Montana with 3.5%; and Idaho with 3.6%.

Methodology

Using microdata from the 2018 American Community Survey from the U.S. Census and hosted on IPUMS, MagnifyMoney analysts calculated the amount of universal basic income (UBI) that each household would receive under the Emergency Money for the People Act introduced into the House of Representatives in April 2020: $2,000 for any U.S. citizen 16 or older and $500 for any citizen under 16. Analysts then calculated the total income of each household and counted those with total incomes below what they would receive from this proposed UBI.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

Advertiser Disclosure

Investing

What Is Wealth Management?

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone and is not intended to be a source of investment advice. It has not been previewed, commissioned or otherwise endorsed by any of our network partners.

Written By

Reviewed By

Wealth management is a top-tier financial management service that caters to wealthy individuals by curating and coordinating the right mix of financial products, experts and strategies to help grow and protect their wealth. It’s a consultative process that focuses on a client’s entire financial picture, not just one part of it.

Someone who is a wealth manager coordinates a team of experts to help their client reach their financial goals. Find out more about what their services entail to help you determine whether wealth management may be right for you.

What does wealth management entail?

For high net worth individuals (as defined by the SEC as having over $1.5 million, or at least $750,000 under management), managing their assets can be a full-time job. This is where wealth management enters the picture.

Wealth management offers a comprehensive package of financial services that can touch on every part of the client’s financial life, from investment advice to tax and estate planning. To do this, wealth managers will tap professionals and experts, such as accountants or lawyers, to help execute their client’s overall financial plan and strategy, which will be customized to their unique situation.

Wealth management services can include:

  • Analysis of cash flow and debt
  • Banking services
  • Business planning
  • Charitable giving planning
  • Estate planning
  • Insurance analysis
  • Investment management
  • Legacy planning
  • Legal advice
  • Portfolio management
  • Retirement planning
  • Risk management and asset protection
  • Social Security analysis
  • Tax advice

Do I need a wealth manager?

When it comes to various types of financial planning services, wealth management is the cream of the crop. Wealth managers generally focus on helping high net worth individuals manage all of the intricacies that come along with high levels of wealth, like tax complexities and estate planning challenges. If you need assistance in these areas, a wealth manager could be helpful.

Wealth managers are usually not needed for the typical consumer, and are instead often enlisted by high net worth and ultrahigh net worth individuals. Many wealth managers require investment minimums that can climb into the millions. In fact, the certified private wealth advisor (CPWA) certification, designed for wealth managers, specifies that it is designed to address the needs of clients with a minimum net worth of $5 million.

Additionally, the fees that wealth managers can charge — typically a percentage of a client’s assets under management — can be a deal breaker for the typical consumer.

Why use wealth management?

Whether or not wealth management is going to be beneficial to you largely depends on your financial situation. That being said, wealth management offers the following key benefits:

  • Convenience: Instead of taking the time and effort to research and hire a slew of different professionals to meet each one of your financial needs, your wealth manager acts as a sort of concierge, bringing the right advisors to you.
  • Personalization: When it comes to customization, it doesn’t get much more personalized than wealth management. Unlike a robo-advisor, which might offer you one of three pre-built portfolios, your wealth manager will make sure that every part of your financial plan — from your investment strategy to your tax plan — is customized to fit your needs and goals.
  • Focus on protecting generational wealth: Wealth management can assist high net worth individuals with the complex process of transferring their wealth, as wealth management services include estate planning and specialized tax help. Your wealth manager should be able to help you minimize fees and taxes, while also focusing on protecting generational wealth.

How does wealth management compare to other services?

Wealth management advisor vs. asset management

It can be easy to get wealth management confused with other types of management services, such as asset management. The main difference between wealth management and asset management (or portfolio management) is that while wealth management takes a comprehensive approach to a client’s finances, asset management takes a more granular approach by focusing specifically on a client’s investments.

The typical role of an asset manager is to focus on the performance of your portfolio and your asset allocation, and can include the following services:

  • Risk assessment
  • Portfolio design
  • Investment rebalancing
  • Tax minimization strategies
  • Monitoring of investments
  • Asset distribution

Additionally, wealth management tends to be more exclusive than asset management. Fidelity, for example, offers an investment management service in which you work with a team of advisors. This requires a minimum investment of $50,000 and an advisory fee of 1.05%. However, it also provides a dedicated advisor for investment management through its Wealth Advisor offering, which requires a significantly higher minimum investment of $250,000 and an advisory fee ranging up to 1.50%.

Wealth management vs. financial planning

Financial planners and wealth managers both fall under the umbrella term of financial advisors, but the two vary in significant ways.

Financial planners focus primarily on helping clients identify and reach their financial goals by designing a financial plan for them to follow. Their services, which are generally focused on lifestyle planning, can include creating a budget, planning for taxes or retirement and setting other savings goals. Meanwhile, wealth managers are more of a one-stop shop, with a focus on growing and protecting wealth.

Additionally, while a wealth manager’s clientele consists of high net worth individuals, a financial planner can serve a broader range of clients, from those who are just starting out to older investors preparing for retirement.

How to choose a wealth management firm

If you’re in the market for a wealth manager, carefully review your options, the services you’re in need of, the costs associated with each firm and the minimum investment requirements.

  • Take advantage of online resources to narrow your options: There are a number of online resources that allow you to scan through a curated directory of wealth managers, filtering out ones who might be a good fit for you based on your age and net worth. The Investments and Wealth Institute, for example, has a CPWA directory, and you can use FINRA’S BrokerCheck to research the background of firms or managers. These resources can be a good place to begin your search for a wealth manager.
  • Review the firm’s Form ADV: One document you should review before employing a wealth manager is the Form ADV. This document is filed by all investment advisors who are registered with the SEC, and includes important information about the firm’s business, clientele, employees, business practices and affiliations, services offered and any disciplinary events related to the firm, its employees or its affiliates.
  • Ask tough questions: Don’t shy away from asking your potential wealth manager the hard questions. Things you should consider asking a potential wealth manager include:
    • How do you define wealth management?
    • Who are your typical clients?
    • How are you compensated?
    • Is any of your compensation based on selling products?
    • What is your investment philosophy?
    • What licenses do you hold?
    • What financial planning designations or certifications do you hold?
    • What are your areas of specialization?
    • Will I work with you, or someone else in your company?
    • What kind of services can I expect?
    • Are you required to act as a fiduciary?

Wealth management FAQs

While wealth managers are not required to have a specific certification, they will likely have financial certifications like a certified private wealth advisor (CPWA), a chartered financial analyst (CFA), certified financial planner (CFP) or chartered financial consultant (ChFC). Wealth advisors will also need a license to buy and trade stocks for clients or to give investment advice.

When it comes to approaching a client’s wealth, a wealth manager will likely employ a number of investing strategies, many of which go back to tried-and-true methods of financial success, as well as focus on the client’s risk tolerance and financial goals. Specific investing strategies that they might deploy could include:

  • Value investing: This investment philosophy actively seeks out stocks that may have been undervalued in the market. These stocks are typically lower-priced than the broad market.
  • Growth investing: This strategy focuses on investing in growth stocks — stocks that are expected to increase in value over time — although they might not have a long history yet of doing so. These stocks are typically higher-priced than the broad market.

At its core, however, a wealth manager generally will use the best strategy depending on their client’s individual needs.

Wealth management does not come cheap. To even gain access to a wealth manager, you will typically need anywhere between $250,000 to over $2 million. From there, fees can range widely from firm to firm but typically hover around 1% of assets under management — Fidelity, for example, charges between 0.50% to 1.50% of your investments.

Wealth managers will typically charge clients based on a percentage of their assets under management. They might also charge a flat or hourly fee for wealth management services that are provided on a one-time basis or as needed. Wealth management firms might also make additional money through commissions earned by selling clients certain financial products.

All information included in this post is accurate as of July 7, 2020. For more information, please consult the Investment Firm’s website.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.