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  • Nick Burgess

Questions To Ask Your Financial Advisor During Your Annual Review

The following article is for entertainment and educational purposes only, and should not be considered financial advice. Please contact a licensed financial professional for individualized advice. Links below may be affiliate links that generate a small commission for the site at no cost to you.


Questions To Ask Your Financial Advisor During Your Annual Review

If you’re reading this, you’re probably preparing for your annual review with your financial advisor, right? Maybe it's your first time, or you're looking for some additional information on how to get the most out of it. Or you're in the market for a new financial advisor and aren't sure what to ask prospective advisors. Well, you're in the right place!

a couple having a financial consulatation with their financial advisor

The annual review is a crucial checkpoint, a time to pause, take stock (no pun intended) of the past year, and strategize for the next. In the financial planning field, one of the best ways to set yourself up for success is by asking the right questions.

Questions To Ask Your Financial Advisor

First Impression Questions

Let's start with the all-important first meeting. Picture this as your first date with your advisor; you’re getting to know them and seeing if they're a good fit for you. You want a certified financial planner or a registered investment advisor, not just a salesperson masquerading as an advisor. So, one of the most important questions is, “Are you a fiduciary?” Fiduciaries legally must put your best interest first, over their own financial gain. If they seem uncomfortable or waffling, that's a red flag on the play folks!

Planning for the Future

Now, let's talk about your current situation and financial future. How has your financial picture changed over the last year? Have there been any life events or major changes that need to be considered? You may be planning for a child’s education, dealing with health care costs, or changing your retirement goal. Your advisor should have a comprehensive financial plan to accommodate these.

Planning for Performance

Let’s dive deeper into your portfolio’s performance. Were there any stand-out mutual funds that won the game last year? Did your asset allocation hold its ground during the market's ups and downs? The stock market can be as unpredictable as a rookie season - how well did your portfolio manager.

Don't shy away from asking about past performance. It's not a perfect indicator of future success, but it's like looking at a player’s stats. You wouldn’t pick a basketball team without knowing their record, right? Similarly, you want an advisor who can demonstrate good, consistent decision-making.

Getting Deep In Philosophy

Next up, your investment philosophy. What's their game plan? Are they a believer in market timing, or do they stick to a more tried-and-true, long-haul strategy? Understanding this is key to ensuring that their investment management style matches your risk tolerance.

Let’s not forget about retirement plans. If you're like most people, that's your end game. You want to build up a solid nest egg. What’s their retirement planning strategy? What kind of retirement accounts do they recommend based on your life stage, savings rates, and long-term goals?

Let's Talk About Fees, Baby

Fees. No one likes them, but we have to talk about them. Some advisors are commission-based, while others are fee-only advisors, charging a flat fee for their advisory services. Get to know their fee structure. Ask your advisor to break down all the costs associated with managing your investment accounts.

The best financial advisors don't just help you grow your net worth; they also protect it. That's where life insurance and estate planning come in. Is your current life insurance coverage adequate? Are your will and beneficiaries up-to-date? Yes, it's a grim topic but as crucial as a buzzer-beater in a tied game!

Are They Pushing Products?

If your advisor is affiliated with a financial institution, are they pushing that institution's financial products? Or are they looking broadly at the best options in the financial markets? You want someone who's going to hunt for the best possible products and services for you, regardless of their affiliations.

Looking Inward

Lastly, the million-dollar question – quite literally. What do they think you could be doing better? Like a great coach, the right financial advisor will guide and support you, but they'll also challenge you when necessary. If there's room for improvement, they should be honest about what changes need to be made.

There you have it, folks! Whether you're a seasoned veteran or this is your first time in the big leagues of finance, knowing these key questions can help you make the most out of your annual financial review. Remember, it's about more than just money; it's about making sure you're set up to live the life you want, both now and in the future. That's a win in my book.

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