Are you unsure about how to manage your portfolio or don’t know what to do with a large inheritance? If this is the case with you, then using the services of a financial advisor like David Snavely is the smartest idea you can ever come up with. However, let me warn you that not all financial advisors are created equal; some might want to scam you to fill their own pockets. As this line of work operates on commission-based sales of financial products, their primary duty is to give you the best advice for your investments and retirement planning.
Although it is best for you to rely on your financial advisor for their expertise, it remains essential to ask questions and understand the whole process. Every investor needs to know about what your advisor does, how they do it, and what strategies they are trying to employ.
Here are 7 questions you should consider asking your financial advisors this year to ensure you get the best advice.
These questions will help you make a decision about hiring a financial adviser and gather information about who will best serve your needs:
1. What Services Do You Offer?
It is important to understand what services they offer and their specific areas of expertise before working with a financial advisor. If you need their financial advice in various financial areas, ask if they offer investment management, retirement planning, wealth management, tax advice, and estate planning services.
2. What Is Your Investing Philosophy?
Every financial advisor uses a different approach to how they establish a strategy in place for money investment. Their investing philosophy sets the standards and principles to create that strategic plan. They’ll be able to easily communicate how they intend to help you achieve your financial goals If your financial advisor’s investing philosophy is well-defined.
3. How Much Do You Charge?
As per David Snavley, It is a good idea to know what your costs will be upfront because you do not want to be overcharged when investing money for savings. Some of the financial advisors work on a fixed while others work on a commission basis. Learning your advisor’s cost structure helps you evaluate the benefit of their service against what you are paying.
4. What Are Your Qualifications?
Learning about the financial advisor’s qualifications is as important as finding out about the job candidate’s qualifications. Learn about all the mandatory certificates your advisor holds. Many advisors only hold minimal courses; you want to avoid these underqualified advisors, as the financial industry is changing really fast. And you need someone most adaptable to the latest happenings in the sector.
5. Do You Have a Fiduciary Duty to Me?
Confirm your financial advisor if they have a fiduciary duty to you or not. And most importantly request every declaration in writing. If you have everything in writing, then your advisor is legally and ethically bound to put your best interests ahead, not theirs. It’s important to understand what their obligations are to you clearly.
6. Which Custodian Do You Use?
A custodian holds and protects your investments, such as stocks, bonds, mutual funds, and other securities. So, it is good that your financial advisor uses a credible custodian to avoid counterparty risk says David Snavley. It is also important to inquire about the custodian’s fee structure, security processes, and technology capabilities to make your case more strong.
7. How Often Do I Need to Review and Update My Financial Plan?
Regularly reviewing and updating your financial plan is crucial to match your financial goals and ever-evolving market conditions. What may have been suitable for your finances 12 months ago may not be profitable with your current situation. It is well established fact to meet your advisor at regular intervals, and If you can’t meet your financial advisor in person, schedule virtual meetings to stay in contact.
Hiring a financial advisor can assist in managing your investment portfolio. However, It’s important to ask probing questions before you enter any contract with your financial advisor.