Telling your financial advisor how much you earn isn't enough. As successful financial leaders, members of the Forbes Financial Council understand what information a financial advisor needs to help a client achieve their goals. Here, they share 13 facts you should share when you meet with your financial advisor. How will they contact you.
A financial advisor will work with you to get a complete view of your assets, liabilities, income and expenses. In the questionnaire, you will also indicate future pensions and sources of income, project retirement needs, and describe any long-term financial obligations. In short, it will list all current and expected investments, pensions, donations and sources of income. Before committing to a financial advisor, you should make sure that you hire the person who is best suited for you and your situation.
Start by asking yourself a key question, then check out the 10 questions you should ask a consultant before hiring one. If you think exploring a relationship with a traditional financial advisor is the right thing to do, be sure to ask these 10 questions during the interview process. Advisors who only pay fees may charge you a percentage of the assets they manage (usually 1%), a fixed fee for services, or an hourly rate. If you are concerned about the cost, you can opt for a low-cost robo-advisor or an online planning service such as those mentioned above.
What will be covered during our personal financial planning meetings? Will you help me with the preparation of a budget? With plans for retirement? Tax planning?. In addition to regular and ongoing meetings, it's important to consult with your financial advisor when you anticipate a significant change in your life that could affect your financial situation, such as getting married or divorced, adding a child to your family, buying or selling a home, changing jobs or getting a job promotion. Finally, if you don't have the time or interest to manage your finances, that's another good reason to hire a financial advisor. A commission-based financial planner may be a fiduciary at some times and may be a broker at other times.
This information may be different from what you see when you visit the site of a specific financial institution, service provider, or product. Some also offer access to financial advisors if you have questions about your investments or your goals. Knowing the income and expense flows is essential for the advisor to properly develop the retirement financial strategy. It begins with a summary of the main findings of the initial questionnaire and summarizes your current financial situation, including net worth, assets, liabilities and liquid or working capital.
Asset allocation is simply a rubric for determining what percentage of your total financial portfolio will be distributed among various asset classes. By analyzing your spending patterns during the first meeting, your financial planner will be able to determine how much you could reasonably save and invest each month or where you could cut back to save and invest more. Knowing the right key questions to ask a financial advisor at the first meeting is critical to a successful relationship. By the end of the meeting, you'll have a solid understanding of where you are financially, where you want to be, and how you'll get there.
A rule proposed by the Department of Labor (DOL) would have required all financial professionals who work with retirement plans or who advise on retirement plans to provide advice that benefits the client (the fiduciary standard), rather than simply appropriate for the client (the eligibility standard). Many of these advisors were trained to be excellent salespeople, but they lacked the skill set necessary to help their customers in different financial situations. Therefore, when hiring an advisor, do your own due diligence first and ensure that the advisor can meet your financial planning needs. Someone may have worked for an investment firm or other financial firm for a long time, but unless they're helping clients like you, your day job is probably different from what you need.