As a financial advisor, I’m often fielding questions from new clients about their investment accounts, the stock market and my role as a fiduciary. This are good questions and a logical place to start, but as we build the advisor-client relationship, I aim to do much more than run through the numbers. My roles is to help them feel confident about every aspect of their financial future.
If you want to get more from your financial advisor, here a few questions to ask at your next review meeting.
Talk About Goals, Not Just Numbers
One way to get more from your advisor is to talk to them about more than just your money. If you say, “I want to have $800,000 in my accounts before I retire,” that means something completely different than, “I want to live near my family in a small, comfortable home and spend my time volunteering and visiting my grandchildren.”
Even if you’ve done the math and you know that would be the amount you need, you may be missing out on tax or savings opportunities you didn’t know were available. Your advisor should be asking you these lifestyle questions, and if they’re not, it’s still important for you to tell them. You never know what you might be missing out on.
Ask About Your Withdrawal Strategy
It’s fairly common knowledge that financial advisors make money when their clients make money. But in most cases, advisors don’t get a commission check when their clients take distributions out of those investment accounts. But that’s certainly no excuse not be there for you through every stage of your life.
Ask your advisor how they would determine the right distribution strategy for your lifestyle and goals. If they answer with the standard 4% and without a well thought out reason for why that’s the right withdrawal rate, dig deeper. And if you still don’t get an answer you like, it may be time to get a second opinion.
Know What Happens When Your Advisor Doesn’t Know the Answer, Either
This is a big one. If you have an in depth question about the new tax laws or estate planning or life insurance and your advisor doesn’t have an immediate answer, where do they go to help you solve your issues? This might seem like an uncomfortable question to ask, but it’s an important one.
Your financial advisor is one person and there is no way they know everything there is to know about financial planning, tax law, estate planning, Social Security and managing your investments. And if they tell you they do, you should run out of that office. Make sure that you are comfortable with the people your advisor relies on when they don’t have all the answers, because that will impact your financial future, too.
If you ask your advisor any of these questions and you don’t like their answers, it may be time to take your financial future to someone who can answer these questions in a way that makes you feel confident that you will have the successful retirement you deserve.
This article was first published on 4/9/2017 in the Des Moines Register.
CFP®, MBA, Series 7 Securities Registration,1 Series 66 Advisory Registration, † Life & Health Insurance License As a CERTIFIED FINANCIAL PLANNER™ professional, Jim brings an extensive retirement income planning background to the team. He regularly writes a personal finance column for The Des Moines Register’s Business...Read More