MONEYSENSE 08.20
7 Questions Every Advisor Should Be Able to Answer
By Merrill Financial Advisor Ray DiBartolomeo
At one time or another, we all face major turning points in our lives—getting married, receiving a life-changing promotion, getting ready to retire. At times like these, many people feel a need to seek financial help.
The challenge is finding someone you will feel comfortable talking to about the most personal things—your family, your money, your hopes for your future. As you interview advisors, don’t be afraid to ask the following tough questions. The answers will help you get a clear idea of what you can expect if you move ahead with the relationship, and whether it would be a good fit for you and your family.
1. What types of clients do you work with?
Some advisors have special experience working with business owners or members of a specific profession. Others have particular knowledge in a specialty, such as sustainable investing or retirement planning. Ask about the team members or resources they can call upon to help you meet your specific needs.
2. What is your track record?
No advisor can or should promise financial results based on past performance. And beware of those who do. But an advisor with a record of long relationships with clients likely provides the kind of service that earns their loyalty.
3. How often will we work together? What is the relationship like?
An advisor should be committed to conversations in person, by phone or online, as often as you require. Be upfront about how frequently and by what means you would like to discuss your finances. Make your personal preferences known from the outset, whether it’s a more formal relationship or a less structured approach. You can also get a sense of what the relationship will be like by gauging how interested the advisor is in learning what your goals are and what keeps you up at night.
4. How can you help me stay on track as I pursue my goals? Am I on the right track?
To realize your goals, you must define them first. Even with a strong idea of what you want to accomplish, the right advisor can help you better understand and prioritize how you might get there. The advisor you select should also encourage you to check in on an ongoing basis, whenever your situation changes, to discuss any course-correcting that may be needed to make sure you stay on the right track.
5. Do you have investments that align to my values?
The choices you make every day can be a reflection of your deeply held beliefs. Your advisor should be able to offer investments that take your values into account. These investments should also be vetted with the same rigor as other more traditional choices to ensure that they can play a role in helping you meet your goals.
6. What happens if the markets are volatile? Will you call me?
When markets get scary, there is nothing worse than feeling isolated and alone. One of an advisor’s most vital functions is to reach out at such times, hear your concerns, offer perspective and talk about any needed adjustments to your strategy.
7. How do I pay you for your work—and how much will it cost?
It is never easy to ask, but the right advisors will welcome this question. Clarity about fees is vital to a successful relationship. Payment—whether a percentage of assets or per transaction—should be structured around your needs and preferences.
