15 Essential Questions to Ask a Financial Advisor When Planning Your Retirement

Looking to find a financial advisor to help you with your retirement? Sometimes it can feel even more difficult than buying a house or a car. Learning how to make money can seem like a scary thing to wrap your head around.

However, a few simple questions can help you decide if your financial advisor is right for you. The following are the 15 best questions to ask a prospective financial advisor.

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1. What is your financial philosophy?

Money is a personal matter, and hopefully you’ll have a relationship with your financial advisor that lasts for years. So it’s important that you decide if you’re a good fit ideologically.

It’s okay if your philosophies are slightly different, this can be a learning opportunity for you, but in order to trust your advisor, you’ll want to be on the same page about some important things.

2. What services do you provide?

Different financial advisors offer different things. If you need specific services, make sure the consultant can deliver. Depending on your needs, you can ask:

  • Tax planning

  • Insurance coverage

  • Budget advice

  • Estate planning

  • Debt management

  • Retirement planning

3. What professional credentials do you have?

Each financial advisor will have their own specific qualifications. Look for respected industry designations such as Certified Financial Planner (CFP) or Chartered Financial Analyst (CFA).

In order to sell or recommend specific products, an advisor may be required to pass licensing exams from the Financial Industry Regulatory Authority, better known as FINRA. He’ll probably have to register with the state, too.

4. Who is your typical customer?

Look for an advisor who has experience with clients in situations similar to yours. For example, if retirement planning is your focus, make sure your advisor has a track record of helping clients plan for their golden years.

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5. Are you loyal?

Some people prefer to make sure their financial advisor is a fiduciary. This means that the adviser is required by law to act in your best interests at all times.

There are many non-accredited counselors who do good, ethical work. However, choosing a fiduciary can give you extra peace of mind.

6. How do you make money?

Financial advisors can take advantage of a wide range of fee structures. If you choose an advisor who makes commissions, he may direct you to products that are not the best for your needs.

Instead, you can choose a consultant who charges you a fee for services. If you’re choosing a fee-only financial advisor, find out if this fee comes down to a percentage of your assets or if it comes in the form of a flat fee.

7. Will you put your payment details in writing?

If you want to be extra careful, ask your financial advisor to provide a written list of all fees and expenses. So you can avoid any unpleasant surprises. Your financial advisor should understand your desire to be “better than sorry.”

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8. How will we communicate with each other?

Communication is a key part of any professional relationship. This is especially true when it comes to money. So, make sure you are comfortable with the advisor’s communication method.

Will your financial advisor mostly call you or will you receive messages via email? Or, perhaps your advisor prefers to meet in person. Find out and make sure it fits your communication style.

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9. How much money do I need for retirement?

For most people seeking financial advice, this is a golden question. There is no “right” answer here, as experts have many different theories. But your financial advisor should be able to give you an estimate and then explain how he arrived at that number.

Do you have other personal financial goals that must coexist with your retirement goal? Your financial advisor should also be able to help with this.

10. When can I retire?

Now that you know how much money you need for retirement, it makes sense that you’ll want to know when you’ll be able to get there.

There is no clear answer to this as future returns are unknown. But your financial advisor should be able to tell you what your retirement schedule looks like based on your specific situation

11. When should I apply for Social Security?

Deciding whether to file for Social Security benefits is difficult because the age you choose will affect the size of the monthly check you receive. It’s easy to find general advice online, but your financial advisor should be able to make a recommendation tailored to your needs and goals.

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12. Do you offer any educational resources?

Different people will have different opinions about how involved they want to be with their financial advisor. If you’re someone who wants to learn as you go, ask potential financial advisors how much they offer in terms of study materials.

13. What taxes can I expect to pay in retirement?

Some people fail to factor taxes into their retirement plan, which leaves them with an unpleasant surprise later on. Your financial advisor can help you prepare for the taxes you will face in retirement.

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14. What do you see as the biggest risks to my retirement?

One of the most powerful parts of financial planning is accounting for risk so you can create contingency plans. By asking an advisor about the risks you face, you understand how closely the advisor is paying attention to the current financial landscape.

If you’re putting the responsibility for your retirement in the hands of an advisor, you want to make sure they’re keeping a close eye on the current and future risks you face.

15. What if I don’t reach my goals?

In a perfect world, all financial advisors would provide a program guaranteed to help clients achieve their goals. However, the world we live in is not perfect.

Your financial advisor should be able to offer you transparency about what they will do if you do not successfully meet our financial goals.

Bottom line

If you’re not sure where to start on your financial advisor journey, you can find a wide range of reviews online. However, it’s never a bad idea to ask your friends and family for their personal experiences. sometimes, first-hand recommendations are the best way to go in the right direction.

Once you find the right professional, you’ll have expert help saving for retirement, learn how to eliminate financial stress, and reach your other financial goals, too.

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This article 15 Key Questions to Ask a Financial Advisor When Planning Your Retirement originally appeared on FinanceBuzz.


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