A financial advisor offers valuable insight about investments, tax and insurance. This can help you to plan for short and long-term financial goals.
It’s a good idea to speak to a few financial advisors so that you can compare what different experts could offer you. Then, once you’ve hired a trustworthy advisor, it’s important that you ask them the right questions. This will help you to get the most out of their services.
Here are some questions to ask when shopping around for the right financial advisor, as well as some questions to ask the advisor you’ve hired.
Questions to ask when choosing a financial advisor
1. What is their background?
It’s important to find out what work experience a financial advisor has had. That way you’ll know if they are new to the job or whether they’ve been in the field for years. You should also ask about their education and check that they have an FSP licence.
2. How do they get paid for the investments they recommend?
Financial advisors should be completely transparent about their fee structure. You should be able to ask them whether they earn commission on investments and whether some investments pay more than others. They should also define which portion of the fee is paid out to them and which portion is paid out to their firm.
3. How can the contract be terminated?
If there are rules about contract termination, you’ll want to know about them ahead of time. Make sure you know when you can terminate your contract and what will happen next. You should ask whether you’ll be refunded and what will happen to your accounts and investments.
Questions to ask your financial advisor
1. What is my financial situation?
Discuss where you are at the moment financially as well as your financial goals with your advisor. You can then see whether you’re on the right track towards meeting those goals.
2. Is my timing realistic?
Ask your advisor whether you’ve given yourself enough time to invest. If you’re planning for retirement, bear in mind that your investment will grow more with time. Depending on your age and financial situation, your advisor may recommend that you adjust your retirement plans.
3. How does my personal life affect my finances?
Remember to let your financial advisor know of any important changes in your life. For example, if you’ve recently changed jobs, about to get married or have a baby, or got a divorce, this could affect your finances.
When working with a financial advisor, trust is the most important factor. You need to trust that they are well qualified and that they have your best interests at heart. You also need to trust that they are capable of giving good advice, and that their advice will help you to reach your financial goals. Asking them these questions should help you to see whether they are worthy of your trust, and whether their services will benefit you.