Why to ask questions to a financial advisor?, Earning money is not easy, one should invest more than 40 hours a week of the time mentally, and physically to lead the life. However, saving, and investing money for the future to have a happy and consistent life is difficult either, because it needs robust planning. Consequently, we need to find financial advisor to have right customized plan for us.

After finding an advisor, it is important to ask right questions to the financial advisor before accepting him/her as a consultant to plan your financials. Answers from the advisor indicates his/her awareness and knowledge to grow your money. Majority of the people are busy in earning but investing them in different baskets to grow is not their cup of tea. Where to invest? Which product to choose? How to achieve a short term and long-term goals.

How long have you been a financial advisor?

Experience matters to prepare an effective customized plan which suits an individual or for a business. Indeed, certifications and degrees would help to understand the client’s requirement and types of investments which are available. The advisor should have experience to map basics of theory to the practicality.

Consequently, the first question you should ask the advisor is “How long have you been a financial advisor”? Extend your questions to be more specific to learn his/her experience because, not every advisor knows everything about financial planning. He could be an insurance expert or a stock market expert or a mutual fund expert so, specific questions about his/her experience would give you more clarity.

What is your risk theory?

Not all the investments are 100% safe, shares, trading, mutual funds, real estate, and other investments are risky, however, the advisor should be able to keep our portfolio in as low risk as possible. Eventually, advisor should be capable enough to analyze below.

• The stock market ups and downs.
• Company’s shares, and their performance.
• Positive and negative impact of politics, policies, news, and governance.
• Positive and negative impact of decisions and policies of a company.
• Demand and supply of the company products and the government encouragement.

Eventually, he/she should keep your financial profile as low risk as possible. So, ask the question that how the advisor do the risk analysis to alert and keep the portfolio safe.

Are you a fiduciary?

Fiduciary is required to act in your best interest because their recommendations and suggestions should be in favor of your need and fulfilment of the goals you wanted to achieve. A product or investment recommendation should be considered based on your goal as highest priority not the advisor’s personal interest. The product and the cost involved in it should be transparent enough to make right decisions. Consequently, particularly important question to ask is “Are you a fiduciary”.

How much of corpus do I need?

Based on your today’s lifestyle you must understand how much corpus needed to maintain at least the same lifestyle after retirement. Wealth of a person will be calculated on the liquid cash, movable and immovable properties. To determine the corpus, your financial advisor should know your age, current monthly expenses, expected retirement age and expected retirement expenses including health care.

Based on these aspects he/she should be able to define a plan with which of the investment options are the best suitable to achieve the goal, how periodically you need to invest, and types of investment options you need to choose. So, ask the question ‘How much of corpus do I need”.

What is your strategy?

Essentially, we all have short- and long-term financial goals to meet. An effective customized plan would allow us to meet the financial goals. How much should be accumulated? How much return on investment should be generated to meet long-term goal? How much money and how frequently does it get released to meet the short-term goals?

The wealth management consultant should have deep understanding about types of investments and the products available currently so that he can guide you to fulfil your goals. So, ask the question “What is your strategy to meet my short-and long-term goals?

How frequently can you share the progress report?

The portfolio may have $1000 or $1 million, but one should have a track of the investments and their performance. Though the financial advisor is managing on behalf of you, its your money, you must cross check the performance periodically to understand how your money is growing. A quick report should brief you to make necessary decisions to keep the portfolio healthy. So, ask to share the report frequently.

Fee and availability

How often does the financial advisor communicate with you to present the performance of your portfolio is important to know because this time can be leveraged to understand about the market, performance about existing products and learning about new products which will help you to make right decisions at the right time. Of course, you need to know how much fee he/she is going to charge for the consultation.

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