Uncommon advice for your financial journey so you're the boss of your financial advisor.
Treat all conversations with potential advisors as if you are interviewing them for a job.
Does this advice surprise you? People frequently give me a funny look when I share this advice. Maybe it’s the pretentiousness of the financial investment industry or the “guru-ness” associated with certain brokerage firms.
When you talk with a financial advisor (or any advisor like an attorney, a CPA, an insurance broker, etc.) – YOU ARE THE BOSS of your financial “company” (aka your life). Any advisor who helps you on your financial journey WORKS FOR YOU.
And remember this: IT’S YOUR MONEY. When you decide to work with a financial advisor, they actual work for you managing your investments. It’s much like hiring an employee for your “company” who is compensated for the services they provide.
Here are some good questions you should ask ANY financial advisor before you decide to work with them.
1. WHAT LICENSES / CREDENTIALS DO YOU HOLD AND IS THERE ANY INVESTMENT VEHICLE YOU CAN’T OR WON’T DISCUSS WITH ME?
This is a great question to find out about what the advisor can or can’t do with your investments. You need to know if they can help you make one only type of investment or only through one provider.
2. HOW OFTEN SHOULD I EXPECT TO HEAR FROM YOU AS MY FINANCIAL ADVISOR ABOUT MY INVESTMENTS?
Unfortunately, some people rarely hear from their financial advisors. This question presents the opportunity for you to express how often you want to talk with your financial advisor about your portfolio of investments and its overall performance.
Before you ask your advisor this question, try to have your own ideal answer to this question. No one expects a weekly call, but you should decide what frequency works best for you on a quarterly, semi-annually or annually basis.
And be sure to you have two-way communication. For example, you read or hear about an investment opportunity which interests you and you’d like feedback. You should feel comfortable picking up the phone or sending an email to set up a time to discuss.
3. HOW IS YOUR INVESTMENT STRATEGY FOR ME BETTER THAN A “DO-IT-MYSELF” INVESTMENT INTO AN INDEX FUND?
Did you know anyone reading this can do their own investments? There are companies that offer products which allow you to invest in an “average” of the overall market. This approach allows you to participate in the ups and downs of the stock market. There are no tactics and no specific strategy – other than the strategy of “participation” – which means your outcomes are not driven by evaluations and analysis.
It is very important to ask this question of an advisor to learn how they will differentiate themselves based on your financial goals and risk tolerance.
Sometimes I’m surprised (and pleased) at the variety of questions potential clients ask me. But too often, people don’t ask ANY questions (for whatever reason). Now there’s no excuse. Now you know the best questions when you are interviewing a financial advisor to help you with your investments.
Please reach out to me to interview me and be sure to ask me these questions.
You can send me an email message or call the office to schedule a time to talk, 470-655-1130.