If you are like most people who think about their money, you probably zero in on one metric – the performance of your investments. However, there is another important factor that can determine how pleased you are with your financial position. That is the investment advisor who guides you and makes money recommendations.
The relationship you build with an advisor will play a huge role in your satisfaction. Building that relationship also depends on asking the right questions.
What services do you provide?
Not only can you find out whether the advisor offers the services you need, but you can determine what is not offered. Some advisors only do just that: provide advice on the investments you want to make.
Others offer comprehensive financial planning for based on your current and future goals. If you need retirement, insurance, taxes and estate advice, find someone who does more than tell you whether a stock is the right selection.
What are your charges for services?
Ask if the advisor charges an initial planning fee and if there is a percentage for assets. Some firms make money by selling a specific product to you. It is good to know how much services will cost and whether there is an incentive to offer you certain things.
What are your credentials to offer investment advice?
There are four main types of financial advisors. The hardest level to achieve is the certified financial planner designation. If you need someone who can manage your money along with offering investment advice, you want someone who is registered to counsel you on which investments are suitable to your needs.
Do you have a client niche?
Some advisors have a niche that might fit your specific interests. You might be a newlywed or a new divorcee. Perhaps you have charitable interests or want to make socially responsible investments. Obviously, you do not want to partner with someone who does not have the knowledge or does not know how to advise based on what is important to you.
Do you have a sample financial plan?
Asking if you can see examples of financial plans the advisor develops will not explain specifics because no one set structure exists. What this will do is allow you to see how much – or how little – information the planner provides.
Some offer 50 pages of charts and graphs that might not easily present the core of what you need. Others offer a 5-page snapshot of their clients’ financial situation. With the sample, you can let them know whether you prefer an in-depth analysis.
Planning for your financial future means you need someone who does more than punch numbers into a template. You need someone who will look at your individual circumstance and advise based on your goals, background and beliefs about money.