Six questions to ask to find the right financial advisor.
October 23, 2018
There are a dizzying number of options when it comes to financial advising. It can be overwhelming to figure out which advisor to work with. The key is finding someone who will respect your unique situation and help you achieve your long-term financial goals. Here are a few questions to ask during your search to help you identify a compatible advisor.
- How well do they understand your financial situation and life goals?
An advisor should work to see the big picture, take the time to listen to your vision and goals, ask detailed questions about your fears and concerns, and find out what matters most. It’s your future, and they should be making it a priority.
- How accessible is your advisor?
Getting answers to your questions in a timely fashion is important. When you need to make a time-sensitive decision or need advice, you need someone who will be responsive.
- Will you receive investment solutions that meet your needs?
Look for an advisor who will take into account your income needs, tax situation, time horizon, risk tolerance and financial goals. Some investment firms and advisors promote off-the-shelf investment solutions that may or may not work for you.
- Will your advisor meet your changing needs over time?
Your world is different today than it was 10 years ago, and it will be still more different in another 10 years. That’s why it’s important that your advisor periodically reviews your investment plan and recommends updates based on changes in the market and in your life. It’s also helpful to work with an advisor who offers access to a broad range of financial services, such as investment management, trust services and private banking, that can meet your needs today and in the future.
- Are you comfortable with your advisor’s recommendations?
It’s likely that you’re seeking an advisor because of his or her knowledge in this area or because you don’t have the time you’d like to devote to your investments. Either way, it’s important that your advisor thoroughly explains his or her recommendations in plain language, presents ideas that are aligned with your goals, and keeps your best interests in mind. If you’re not comfortable with or don’t understand your advisor’s recommendations, they may not be the right advisor for you.
- How is your advisor compensated?
Financial advisors can be compensated in a variety of ways, including a percentage of assets managed, a commission on transactions, an hourly or agreed upon rate, or any combination of these. Don’t hesitate to ask questions about your advisor’s compensation as it relates to your investments. An objective advisor will make decisions based on your best interests, not theirs.
