Whether it’s buying a car or a new property, you wouldn’t rush into making a big-ticket purchase without finding out more. If that’s the case, then why shouldn’t you know the details of how your financial advisor or wealth manager works?
To help you get started, here are some tough questions to ask your financial advisor so you’re aware of what you’re signing up for.
#1 What Is Your Investment Philosophy?
Some may argue that it isn’t important to ask this question, it’s always good to know that you have the same investment philosophy. You have to believe in what they’re doing and stick with it – which is essential when the market is down. Other than that, ask who are their typical clients and find an advisor who is experienced in a situation like yours so as to help you meet your goals.
#2 How Often Will We Talk?
To ensure your goals are met continuously, it’s important for your advisor to focus on delivering proactive and transparent communications. Find out how often you’ll be speaking with them, will they be proactive in sharing their rationale on buy/sell decisions, or if there will be any regular commentary that are readily accessible to you
Making these types of resources available will help you stay informed on what you need to know as you actively monitor your accounts.
#3 What Are My All-In Costs?
In addition to advisor fees, there will be other costs added and you’d want to know what they are. Fees can decimate your savings over time, and you might find yourself losing a lot of your net worth than you’d realise.
Bonus Question: What Happens To My Money If Something Happens To You?
As uncomfortable (and gloomy) as this might be, it is essential to know your advisor’s succession planning. Your advisor should have a detailed succession solution should something unexpected happen. If the firm is going to take over, the high level of service you’ve come to expect should not change, and the same group of experts should continue to serve you for all of your wealth management and financial planning needs. Also, don’t hesitate to ask this in writing.