What’s the #1 Thing People Should Ask Their Financial Advisor (But Never Do)?
So you have a financial advisor. You’ve worked hard, used a budget, and managed your money. You have assets, and savings. Maybe you’re considering investing, or you’re already investing but you want to refine your investment strategy. Or maybe you’re just feeling like your financial life has gotten so complicated that you need professional advice to sort it out. That’s a smart move: if you know you need help, it’s always a good idea to look for it, and to get it from someone qualified.
But how do you make the most of your financial advisor? What do you need to know, and what questions should you ask?
What to Ask a Financial Advisor?
To give you a head start, we asked 13 financial professionals a simple question:
What’s the #1 question that people should ask their financial advisor, but usually don’t ask.
Let’s look at the answers.
Arvind Ven
CEO and Founder
Can you walk me through your investment philosophy and strategies?
While that is a good question, people should not run and do that by themselves for several reasons:
Risk tolerance / Risk profile can vary significantly even among people with seemingly comparable financial situations. That also varies with age. They should never chase certain strategies or ‘glamorous’ stocks just because a friend or someone in their family told them to. Having a financial plan and sticking to it is key especially during times of volatility.
For example, the very first thing that we do with a prospective client is to gauge their risk profile (with a detailed questionnaire) while learning more about their financial status, goals and expectations.
Many people don’t understand their own true risk tolerance. Walking them through their ‘risk score’ while analyzing their existing portfolio is eye opening to them in terms of risk level mismatch between where their portfolios currently versus they should be based on their risk tolerance.