Everybody wants their finances in tip top shape. Nobody wishes to see curveballs thrown at them in any capacity of life. This includes the financial world, where curveballs happen on a daily basis. Yet we are able to best prepare ourselves for such situations by arming ourselves with the top people to assist us. For dental health those people are dentists, for legal help they are lawyers, and for financial help, they are financial advisors.
Financial advisors studied throughout their schooling careers to optimally assist clients in understanding their financial options. The advisors work with clients on an individualized basis to ensure they are getting the most out of their money. While advisors feature plenty of clients, they work under the knowledge that each client presents different situations for them to address.
While choosing to work with a financial advisor is a positive step already, knowing the questions to ask them goes a long way towards maximizing what you get out of the process. Once you choose to work with a financial advisor already, receiving the most assistance possible works to put you in the best position financially for your present and future. However, you may not know what questions to ask. Let’s take a look at questions you should be asking your financial advisor.
Questions You Should Be Asking Your Financial Advisor
1. What Experience Does Your Financial Advisor Have?
Experience matters when it comes to financial advising. Certifications help display knowledge and ability to work the system in your favor. Designations exist as ways of measuring how long Financial Advisors worked to enter the field. Designations to look for include CPA, CFP, CFS, ChFC, CFA, and CLU. CPA means they are a certified public accountant. CFP represents certified financial planner, while CFS means certified fund specialist. As you can tell by those designations, there are various titles for various roles. Asking which designations your Financial Advisor owns will ensure you receive solid, personalized assistance.
2. What Access to Information Will You Have?
Financial Advisors often work on their own, asking for your trust in what they are doing. However, you may feel more comfortable knowing what they are doing and why. You have every right to know what is being done to improve your financial standing. Should you wish to be in the loop, asking your Financial Advisor how in the loop they will keep you is key. While the top Financial Advisors will cater their work towards your wishes, some choose to work alone and only alone. Asking this question prevents you from placing yourself in a relationship that will not work.
3. What is Your Investment Philosophy?
When working with a doctor, you want to know what the doctor is doing to treat you. When working with a lawyer, you want to know how the lawyer is approaching your case. Working with a Financial Advisor is no different in this sense. You have every right to ask your Financial Advisor how they like to go about their business. Are they risk takers? Do they believe playing things safe keeps the money flowing better? Besides getting an explanation of how their line of thinking works, you will also be able to see if your philosophies match. If you are uncomfortable with how their philosophies work, they are not right for you.
4. How Is Your Financial Advisor Paid?
Many different Financial Advisors work in different ways. Some ask to be paid for investments they recommend, while others are paid based on a commission basis additionally. Financial Advisors often charge more than you previously believed they would, throwing in fees for different services you did not know cost anything. Advisors must be transparent about their different fees. Once you know what they are charging you for and why, you are able to make a much more educated decision about how or how not to work with them. Additionally, considering they are working as part of a team, it is only fair to know how much of the fee goes to them, and how much goes to their company.
5. How Many Clients Do You Have?
We all want our Financial Advisors to work on an individualized basis with us. You have every right to ask how many clients your Financial Advisor is working with, then using that to help make your decision on how to proceed. Limiting the number of clients accepted each year means that the Financial Advisor will have more time to work with you on an individualized basis. Since that is the end goal, hearing that the Financial Advisor does not have a great bounty of clients can ease your concerns about working with them. This question is extremely transparent, and how they answer it can make a significant impact on how much you are inclined to work with them or not. After all, we all want the best treatment. That can only happen when we receive personalized attention.