Questions to ask your financial advisor

Thinking about hiring a financial advisor? Here are some questions you can ask to find the right one for you.

Interviewing a financial advisor can help you determine if you’re a match with their style of services. Here are a few questions you can ask that will allow you to gauge whether they will be the right person to help you reach your financial goals.

1. Do you offer financial planning?

Financial planning is the method by which your advisor reviews your financial situation and returns with suggestions for a healthier financial plan to reach your goals. This can include and not be limited to:

Investments

What kind of investments have you made?

This will give you a brief overview of the type of investments they make and can help you understand whether you’re comfortable with your money being a part of their portfolio management style.

What is your portfolio’s success rate?

This helps you find out how effectively they will be able to manage your money. A successful portfolio with multiple, consistently good returns should inspire enough confidence for you to trust them. Past performances indicate the skillset of a financial advisor. Firms, or individual advisors, often pride themselves in how much they’ve returned for their clients. However, one must keep in mind the market at the time, so returns may not be a clear indicator of their individual ability. 

Taxes:

Tax advice: This will help determine whether they offer tax advice as well. Some financial advisors stick to just investments, while others also take charge of your taxes. 

Tax saving performances:

Much like the investment portfolio, one can understand their performances when it comes to tax payments and tax savings. There are multiple ways one can save on tax, including retirement funds and other forms of tax savings.

RRSPs:

A separate category of investments, RRSP’s, are retirement funds that are taken from the pre-tax income of those who opt for it. The financial framework around these investments can be difficult to understand – however, they can be better explained with the help of a qualified financial advisor.

2. What should I expect?

You should ask questions on what you should expect from a financial advisor. For example, a couple questions you might ask include:

How much do you charge?

Some financial advisors charge layered fees while some of them charge performance-based variable fees. Some of the costs are also embedded in the products so pay attention to these details.

Do you have a charge sheet?

A charge sheet lists the different products, pricing, and the breakdown of costs that a financial advisor may charge. It also mentions whether they can allow you to bring in an additional family member onto the plan.

3. What are your qualifications?

Qualifications or designations help assess whether your money will be secure in their hands. Savings, investments, and retirement funds are something you’ve worked all your life for. It’s necessary to know who you are passing on the responsibility of taking care of your money to. A well-qualified financial advisor or a highly regarded firm can make a difference.

How can I contact you and how often should we meet?

You’ll want to know what’s happening with your money! You’ll also want to know what you can expect going forward. Keep in mind, money compounds over time - there’s not a lot that can change in a day, a week, or even a month. Speak to your advisor and strike a balance on how often you will be in contact with one another. Confirm their communication methods align with your needs, and make sure that availability is never in question.

Decision making on investments.

Money management is never fully outsourced. Everybody has concerns about how their money is managed. Sometimes you’ll have your own ideas on where your money should be invested. Ideally, you’ll work with an advisor to chart out a plan of action. If you can find an arrangement that permits you to make suggestions or find a balance between decisions they make and suggestions you offer, then you can be confident in your contribution efforts and that your voice is being heard.

Final selection of a financial advisor

These three larger umbrellas cover most of the questions you need to ask to be confident in your selection of a financial advisor. If you have any doubts over the answers, you would be wise to chat with other advisors until you find the right fit.

Above all else, one critical point stands out…Trust. Trust is the combination of all the above factors validated by your intuition. There’s something about that gut feeling! If you find your gut suggesting you pick a financial advisor, or more importantly avoid one, then go with it.

Finances are strongly linked to time, and any growth and expectations you have will only follow if you provide the space for the financial advisor to perform what they are good at. So, keep in mind that the questions you begin with will only provide so many pieces of the puzzle and those pieces must be enough for you to see the larger long-term picture. The rest of the details, you can fill in as you go.

We welcome the opportunity to meet with new clients to see if we’re the right fit for you. We’re confident someone from our team can give you piece of mind by creating a clear, actionable strategy to meet your financial goals. Book an appointment with one of our Wealth Specialists to get started.

Contact Us

Mutual funds and related financial planning services are offered through Credential Asset Management Inc. Mutual funds, other securities and securities related financial planning services are offered through Credential Securities, a division of Credential Qtrade Securities Inc. Credential Securities is a registered mark owned by Aviso Wealth Inc. Financial planning services are available only from advisors who hold financial planning accreditation from applicable regulatory authorities. The information contained in this report was obtained from sources believed to be reliable; however, we cannot guarantee that it is accurate or complete and it should not be considered personal taxation advice. We are not tax advisors and we recommend that clients seek independent advice from a professional advisor on tax related matters.

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