The relationship between you and your advisor lays the groundwork for a sound financial strategy, and can help you feel knowledgeable and in control of your future. Finding the right advisor for you can feel overwhelming at times, so we’ve compiled 10 key questions to ask when choosing one.
1. How will we work together?
You might be an experienced, hands-on investor, or maybe you want to delegate decision-making to an expert. Many firms offer the services of traditional advisors, online financial planners, robo-advisors, or a combination of these. Ask about your options, find out what makes sense for you and ensure your advisor offers support in whichever capacity you need.
2. How will you communicate with me, and how often?
Open communication should be a priority for you and your advisor. Whether it’s through in-person meetings, virtual check-ins or a combination of both, the frequency and method of communication should work for both of you.
An advisor should also be proactive, providing you regular market updates and the latest investment guidance and research.
3. What services do you provide?
Consider the products and services you might need and make sure they’re offered. Straightforward financial needs like an IRA or annuity might be table stakes, but you may have more complex financial needs that require more comprehensive management.
4. What’s your investment philosophy?
An effective financial advisor will take the time to learn about you, your unique financial picture, as well as your reason for investing. They should ask detailed questions about your immediate needs, short- and long-term goals and risk tolerance, and plan accordingly.
Ask if the advisor favors one style of investing or a particular type of investment, and how they respond to market volatility.
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5. How will you track my investment performance?
An advisor should help their client create a clearly defined strategy, track their progress and benchmark the short- and long-term goals along the way.
Ask your advisor about the criteria they use to define success, how they report and communicate your progress and when to further diversify or rebalance your portfolio.
6. What professional experience do you have?
Advisors often have career experience outside financial planning that can enable them to offer more specific insight. They might be a former accountant or someone with a managerial or military background, for example, or bring other life experience to the table similar to your own.
Additional industry certifications like a CFP, CIC or ChFC can help an advisor better serve their clients. These can be verified on the BrokerCheck tool at FINRA.org.
7. What resources will I have when working with you?
A financial advisor may work independently or as part of an investment organization, which may become important as your financial needs grow more complex.
Ask about online tools or the firm’s app to conveniently monitor and make changes to your portfolio. And inquire about firm resources so you can stay up to date on market news and other educational materials to stay informed and track progress.
8. How are you paid?
Financial advisors use a variety of fee structures — a percentage of the assets managed, a flat fee, transaction fees, an hourly rate, or a combination of these. Ask the advisor how they’re compensated, and ensure what they say is transparent and aligned with their marketing materials.
9. How will you consider assets you aren’t directly managing?
Your net worth may include assets not directly invested with a finance firm, like an employee-sponsored 401(k), or rental properties you may own. Communicate your full portfolio to your advisor so they can guide all your assets toward your overall goals.
10. Do you work with CPAs or attorneys?
If you’re a business owner, planning an estate or have complex financial circ*mstances, other professionals will likely need to coordinate with your financial advisor. Will the financial advisor you’re considering work with professionals already on your team, or will they provide referrals if you need these services?
There are many benefits to working with a financial advisor, but it’s important to find one who’s right for you.
Choosing the right financial advisor for your needs
If you’re considering working with a financial advisor, you can get started with Edward Jones today. We’re a firm built on relationships, and our advisors are committed to creating personalized strategies so you can achieve the future you want.
