How Should High-AUM Families Evaluate Whether Their Current Advisory Team Is Still the Right Fit?

Most families we sit down with haven't formally reviewed their advisory relationship in years. Usually that isn't because something went wrong. The team is familiar, the meetings are pleasant, and nobody wants to start an awkward conversation.

Comfort isn't the same thing as fit. A structure built for one balance sheet may not suit a much larger one. A review isn't an accusation. It's maintenance.

Here's how we'd suggest starting one.

Start With the Paperwork You Receive

Every registered adviser must hand you a disclosure brochure, Form ADV Part 2A, before or when you sign your agreement. If anything material changed during the year, they owe you either a current brochure or a summary of material changes within 120 days of the end of their fiscal year.

Most families file that mailing unopened. Open it. The summary is short and tells you what the firm changed about itself: new owners, a new fee schedule, a new affiliate, and a new disciplinary matter.

Know The Standard They Owe You

The SEC describes an adviser's fiduciary duty as having two parts, a duty of care and a duty of loyalty. The adviser has to serve your best interest at all times and can't put its own interests ahead of yours.

Here's the part worth knowing. That duty may not be waived. An agreement can shape the scope of the work. A clause saying the firm isn't acting as your fiduciary, or waiving every conflict in a single line, isn't consistent with the law, and the SEC says that holds regardless of how sophisticated the client is.

Being a large, experienced family doesn't lower the standard you are owed.

Compare The Monitoring You Pay to the Monitoring You Get

The duty of care includes providing advice and monitoring at a frequency that's in your best interest, given the scope of your relationship. The SEC has said that when a firm has an ongoing relationship and charges a periodic fee based on your assets, its monitoring duty is relatively extensive.

That gives you a fair question to ask. If you're paying an ongoing asset-based fee, what happens between meetings? Ask when your allocation was last revisited, when your plan was last stress-tested, and when someone last looked at your trusts, your entities, and your insurance.

Read The Conflicts Section

Form ADV Part 2A requires the brochure to spell out how the firm is paid and whether its fees are negotiable, what other costs you'll carry like custodian charges and fund expenses, whether the firm is tied to a broker-dealer, bank, insurance agency, accounting firm, or law firm, whether it receives research or other benefits from the brokers that handle your trades, and whether anyone is compensated for referring you.

If your fee schedule isn't in the document, ask for it in writing.

The brochure also has to say whether accounts are reviewed on a regular schedule, how often, and the job titles of the people doing it. Hold that up against your experience.

The SEC has said that describing a conflict the firm "may" have, when the conflict already exists, isn't adequate disclosure. Hedged wording deserves a direct question.

Confirm Who Is Holding the Money

Under the custody rule, your adviser needs a reasonable basis to believe a qualified custodian sends you account statements directly. You can check what the custodian says you own against what your adviser reports, including the fees deducted from your accounts.

If your firm is registered with the SEC and no statement arrives straight from a bank or broker-dealer, ask why. If the two statements disagree, raise it with both the firm and the custodian.

Pull The Public Record

The SEC offers a free search tool that leads to the Investment Adviser Public Disclosure database. You can confirm that the firm and the individuals are registered, read the current Form ADV, and review any disciplinary history.

Do this even for a firm you've used for fifteen years. Filings change. Ownership changes. Fifteen minutes is a small price.

Then Ask What the Filings Can't Tell You

Who covers our family if our lead advisor leaves next month? Who else here knows our trust structure well enough to be useful in a crisis? Is the firm being sold? What are we not getting from you that we should be?

The Real Test

We'll admit our bias. A team that fits will welcome this review. They'll hand over the documents, walk you through their conflicts, and answer the uncomfortable questions without getting defensive.

A team that bristles has told you something too. Either way, you'll know more than you did.

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