Choosing the right investment professional to help you plan your family’s future is a big decision. Most people consider a variety of different factors when interviewing potential financial advisors, from the testimonials of past clients to the firmness of their handshake.
Inviting someone into the personal details of your financial life is a huge leap of faith. A qualified financial advisor won’t mind your pointed questions and in fact, will be happy to see you taking such a big decision so seriously. Whether you’re just getting started with our team here at Cornerstone Retirement or are early on in the process of selecting a financial professional to work with, here are four questions to ask to gain a better understanding.
Whose responsibility is it to communicate?
This is such an important question! Communication differences are one of the main issues our clients tell us they’ve had with past advisors, so it’s important to devise a strategy for keeping in touch from the get-go. Tell your advisor what you expect. If it’s an email a month just to summarize how your funds are doing, great; if it’s a return phone call only when you actively leave a voicemail, that’s fine too. Everyone likes to communicate differently and what’s important isn’t how your advisor communicates with other clients, it’s how they’re willing to communicate with you.
What is your compensation structure?
A competent financial advisor shouldn’t hesitate to answer this question, and you might be surprised how many different ways financial professionals get paid. Some make money only when your investments do, and some are “fee-based” like Cornerstone Retirement. Some even get paid just for putting your money in specific funds or vehicles…knowing what you’re comfortable with is the best way to feel out the answer to this question.
How did you handle the recession?
Financial advisors don’t get this question a lot, but they should. You should probe whether they changed investment strategies at request of their worried clients or stayed the course during the 2008 meltdown. Discerning whether the advisor stayed committed to their strategies or yielded to pressure tells you a lot about how they’ll manage your money if and when an inevitable downturn happens again.
What is your overall investment philosophy?
Your investment professional should be able to answer in just a few sentences what their overall strategy for investing really is. Does their answer make sense, or is it too complicated to feel transparent? At this point in the conversation, ask yourself whether or not the advisor is using language appropriate to your level of financial knowledge and whether they’re listening or just pitching.
At the end of the day, the best financial advisor for you is one you feel comfortable with. Having an advisor you can call with your questions, concerns, or worries is paramount, as the most successful advisory relationships last for many years. If you have a question give us a call (402) 333 – 8751. Omaha’s Retirement Specialist