AT ONE TIME OR ANOTHER, WE ALL face major turning points in our lives—getting married, becoming a parent, receiving a life-changing promotion, getting ready to retire. At times like these, many people feel a need for financial help. They begin to question whether they know enough about the complex financial decisions they’ll have to make to continue to go it alone and start to wonder whether working with a financial advisor might make sense.
The challenge is finding someone you'll feel comfortable talking to about the most personal things—your family, your money, your hopes for your future. Someone who'll be there for you for years to come, and who can provide more than just stock recommendations.
The challenge is finding someone you'll feel comfortable talking to about the most personal things—your family, your money, your hopes for your future.
As you interview advisors who may be able to help you with those decisions, don't be afraid to ask the following tough questions—they'll help you get a clear idea of what you can expect if you move ahead with the relationship and whether it would be a good fit for you and your family.
1. What types of clients do you work with?
Some advisors have special experience working with business
owners or members of a specific profession. Others might have
particular knowledge in a specialty, such as sustainable investing or
retirement planning. Ask what team members or resources from around
their company they can call upon to help you meet your specific needs.
2. What is your track record?
No advisor can or should promise financial results based on
past performance. And beware those who do. But an advisor with a
record of long relationships with clients likely provides the kind of
service that earns their loyalty.
3. How often will we work together? What is
the relationship like?
There is no one-size-fits-all answer to this question. An
advisor should be committed to conversations in person, by phone, or
online—whatever your preference is—as often as you require. Every
client has different needs and expectations. Don’t be shy: Be upfront
about how frequently and by what means you would like to get together
to discuss your finances. Some people prefer a more formal
relationship, with regularly scheduled meetings, while others might be
more comfortable with a less structured, more relaxed approach to
financial conversations. Make your personal preferences known from the
outset. You can also get a sense of what the relationship will be like
by gauging how interested the advisor is in learning what your goals
are, what’s most important to you—and what keeps you up at night.
4. How can you help me stay on track as I
pursue my goals? Am I on the right track?
In order to have the potential to realize your goals, you have
to clearly define them first. Even if you have a strong idea of what
you want to accomplish with your money, the right advisor can help you
better understand and prioritize how you might get there, including
helping you understand any necessary tradeoffs you may have to make
based on your finances, time horizon, cash flow needs and investing
preferences. Life has a way of changing, too—sometimes without
notice—so the advisor you select should encourage you to check in on
an ongoing basis, whenever your situation changes, to discuss any
course-correcting that may be needed to make sure you stay on the
right track.
5. Do you have investments that align to my values?
The choices you make every day—from where you choose to eat to
the companies you choose to invest in—can be a reflection of your
deeply held beliefs. Your advisor should be able to offer investments
that take your values into account—whether in the area of
sustainability, social responsibility or corporate governance. These
investments should also be vetted with the same rigor as other more
traditional choices, so that they are aligned with all your other investments.
6. What happens if the markets are
volatile? Will you call me?
When markets get scary, there's nothing worse than feeling
isolated and alone. One of an advisor's most vital functions is to
reach out at such times, hear your concerns, offer perspective, and
talk about any needed adjustments to your strategy.
7. How do I pay you for your work—and how
much will it cost?
It's never easy to ask, but the right advisors will welcome
this question. Clarity about fees is vital to a successful
relationship. Payment—whether a percentage of assets or per
transaction—should be structured around your needs and preferences.
Connect with an advisor and start a conversation about your goals.
