8 Questions You Need to Frequently Ask a Financial Advisor

8 Questions You Need to Frequently Ask a Financial Advisor

A financial advisor is a professional finance specialist who consults and advises individuals and entities on money, personal finances and investments. They apply their knowledge and skills to create tailored financial plans that help clients accomplish their financial goals.

Financial advisors do more than just execute market deals on behalf of their customers, they can be independent agents or employees of big financial institutions. If you're looking to hire one to manage your finances or already have one.

Here are some questions you need answers to:

8 Questions You Need to Frequently Ask a Financial Advisor

8 Questions to ask a Financial Advisor

1. What investment strategy should I adopt or would work best for me?

As a beginner, this question allows the financial advisor to find the best investment strategy to achieve your financial goals. For every investor, what is termed “the best strategy” will be different. This is why financial advisors make these decisions for you based on your goals, risk tolerance, and future needs.

However, if you are not new to investing, a question to first ask your financial adviser could be: “Is my investment strategy working?” Inquire about the latest reports. If you don't understand them or are unsure your approach is assisting you in meeting your objectives, get clarification.

While some variation is natural, you want to ensure that the investment strategy is still sustainable and will achieve your goals over time. If it isn't sustainable, consult with your adviser about other approaches to follow to reach your financial goals.

2. How can I prepare for financial emergencies better?

While you can't plan for everything, having an emergency fund will give you peace of mind and help you stay on pace to meet your objectives if something unforeseen occurs, such as an epidemic. Talking with your adviser on a regular basis about strengthening your emergency financial plan can help you prepare for the unexpected.

3. Do I need to change my retirement plan to meet my objectives?

Retirement planning may take a lot of time and study, and it is susceptible to change on a regular basis. Checking in with your adviser on the status of your plan can help you discover its weak areas and show you how you can work together to maintain its viability. When it comes to long-term planning, such as retirement, the earlier you identify obstacles, the better your retirement will be.

4. What should I prioritize in my financial plan?

Discuss what your priorities are at frequent check-ins with your financial advisor. It helps you stay on course and align with the objectives for the year or quarter. If you are planning a trip or approaching retirement, ask your adviser about how to financially prepare for these occasions. Similarly, your adviser might advise you on how to focus more on key aspects of your plans.

5. What does a realistic budget based on my goals look like?

Know how to budget each month to achieve your objectives within the time period you set for yourself. Your adviser may take you through the steps of creating a successful budget, propose tools to assist you, and even explain how to spend, save, and invest your money to achieve your long-term and short-term objectives. To do so, you must be honest with your advisor about your financial condition and your goals. This might contain your annual earnings, present retirement funds, and projected costs.

6. How do I adapt my financial goals to my current stage in life?

Your financial plan may need to be adjusted as you grow and encounter different life events. This might happen after getting married, having children, building a career, or retiring. It's critical to notify your adviser of any changes so that you can adapt your plans as required.

Before meeting with your adviser, ask yourself a handful of these questions to give you a better direction and vision of what you want to achieve. When you have a clear vision of what you want, your adviser will be able to design a strategy and give direction to help you achieve it.

7. What can I do to protect and maximize my finances?

An excellent catch-all question to compensate for your blind spots is "what else can I do?" Your adviser can suggest strategies for you to save more money, achieve a higher return on your assets, or better protect yourself against financial fraud or risks. It may also be beneficial to do your own self-reflection to find areas for growth. You can then present your ideas to your adviser for feedback or recommendations.

8. How will you monitor the performance of my investments?

Inquire with your financial advisor about what success looks like in terms of your personal financial goals. Your financial adviser should be tracking your investment performance KPIs in terms of how it contributes to the achievement of your long-term goals. Of course, being on top of market trends and volatility is crucial, they should also assess any short-term movement against your long-term goal.

Financial planning is crucial in identifying and managing financial risks and opportunities. Financial planners help employ appropriate strategies and select the investment mix for their customers' portfolios by assessing risk tolerance and learning about their client's goals.


Source: Legit.ng

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