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When you first meet with a financial advisor to see if they’re a good fit, you’ll probably have at least some idea of the questions you want to ask.
Some financial advisors and experts who spoke to GOBankingRates suggested some questions they want new clients to ask. You may be surprised how useful information such simple inquiries can yield when you try to find a good partner.
1. How do you get paid?
According to Andrew Lokenath expert in financeThis is the most important question, and almost no one asks it. Fee-only advisors charge you directly. Commission-based advisors get paid when you buy certain products. Fee-based advisors do both.
“During my time on Wall Street, I observed that clients were attracted to investments that pay the advisor better, not investments that provide better service to the client,” Lokenath said. “You are entitled to know whether your consultant makes more money selling you Product A versus Product B.”
2. How can we simplify our finances?
According to Kevin Estes, CFP, founder of scaled financeAccounts and investments seem to be increasing. This can be overwhelming.
“Consolidating accounts can eliminate logins, statements and transfers,” Estes said. “Streamlining investments can improve visibility and simplify management. Automating transfers and payments can also help.”
3. What is your investment philosophy?
Marguerita Cheng, CFP, CEO Blue Ocean Global WealthSaid this is one of the questions she wants new customers to ask. After all, it is incredibly helpful to align the investment philosophies of the client and the financial advisor.
4. How do you help me save tax?
Taxes are generally one of the largest expenses a person will face in their lifetime.
“In my experience, many people don’t make this a top priority when planning,” said Brandon Gregg, CFP, advisor. BBK Wealth Management. “Yes, there are many areas of planning and they are all important, but taxes should be at the top of the priority list. I would argue that retirement planning or financial planning in general is never complete if taxes are not addressed.”
Christopher Stroup, CFP, Founder and President silicon beach financialThat said, taxes quietly shape your long-term outcome more than most people realize. “By understanding how income, equity compensation and investments interact, you can keep more of what you earn and avoid decisions that look good short-term but hurt in the long run,” he said.
5. How do I plan for health problems and long-term care?
According to Greg, most new clients want to know what they will have to do or have to do in order to retire. He said it’s a specific year or time in the future, and he has tunnel vision on that. However, he said, it’s important to think about all the possibilities in retirement.
“Health issues are one of the biggest things that can derail a plan,” Gregg said. “It is important to discuss these potential obstacles and the opportunities available to them to plan and protect their future, no matter the circumstances.”
