When it comes to your financial situation, utilizing the services of a professional is invaluable. Advisors assist with navigating major life decisions and developing a plan to help you achieve your financial goals. Deciding on the best person to fill these shoes, however, can be overwhelming. Here are important questions to consider asking a financial advisor:
What can I expect from our relationship?
Before choosing to work with an advisor, it is important to know how much access you will have to them. What is their typical turnaround time for responding? Are they available for phone calls and emails? Most importantly, how often will your advisor meet with you? Advisors often offer additional services outside of scheduled meetings, such as weekly email updates and seminars to help keep you in the know. Find out what your advisor offers and what you can expect from your relationship with them.
What are your qualifications?
Advisor credentials are important as they indicate that an advisor has dedicated time to expanding their knowledge of the industry. If an advisor is a fiduciary, they work in the best interest of the client. Additionally, some credentials are specialized to assist with unique financial situations. You probably won’t know what most of the letters following their name mean, but check out the Financial Industry Regulatory Authority database to understand what each designation means.
What are your costs/fees?
Before choosing an advisor, be sure to confirm their costs and fees. Are they fee-based or fee-only? A financial advisor should establish the services that you can expect to receive as a result. If an advisor is reluctant to provide a straightforward answer regarding their costs and fees, reconsider working with them.
What is your investment philosophy?
Understand an advisor’s approach to investing. Make sure you are confident with their philosophy and that you are willing to abide by it, especially when the markets get rocky. Additionally, it is important to know their style of investing to ensure their approach is aligned with your values.
How will you measure and evaluate my investment performance?
Find out how the advisor analyzes your investment performance. On a regular basis, they should review with you and compare your YTD returns to the appropriate benchmark. In choosing your benchmark, consider your current asset allocation. For example, don’t compare an all equity portfolio to a benchmark that includes bonds. Your advisor should break this down for you and analyze the dividends or yield of your portfolio so you know your investment income.
Representatives do not provide tax and/or legal advice. Any discussion of taxes is for general informational purposes only, does not purport to be complete or cover every situation, and should not be construed as legal, tax or accounting advice. Clients should confer with their qualified legal, tax and accounting advisors as appropriate.
Chris Kampitsis is a registered representative of and offer securities, investment advisory and financial planning services through MML Investors Services, LLC. Member SIPC. www.SIPC.org 6 Corporate Drive, Shelton, CT 06484, Tel: 203-513-6000 CRN202211-274242