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 on their own—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 the person would be a good fit for you and your family.
1. What types of clients do you work with?
Some advisors specialize in working with business owners or
members of a specific profession. Others might have particular
knowledge in certain areas such as sustainable investing or retirement
planning. Ask whether the advisor has experience, or has access to
team members or resources, that could 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 of those who do. But an advisor with a
record of long relationships may be more likely to provide the kind of
service that earns client 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 communicating with you 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. 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 pretty clear 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 recognize any tradeoffs you may need 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
whenever your situation changes, so that you can discuss any course
correction 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 your concerns are about
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 the markets get scary, there's nothing worse than feeling
isolated and alone. One of an advisor's most vital functions is to
reach out to you at such times, hear your concerns, offer perspective
and talk about any needed adjustments to your financial strategy.
7. How do I pay you for your work—and how
much will it cost?
It's never an easy question to ask, but the right advisors will
welcome it. 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.
