Key Questions to Ask Your Financial Advisor

Questions to ask your financial advisor

Depending on what’s going on in your life, the key questions to ask your financial advisor can vary greatly. Maybe you just got married. Perhaps you started a new job. Kids? New home? There are many variables that affect the first, or the fortieth visit to your financial advisor.  

There are also just as many listicles highlighting the top questions you need to ask your financial advisor. Most stipulate you need to have your goals sorted out beforehand. We’re going to respectfully disagree on that point right out of the gate.

Yes, but No

Often, the reason we are seeing a financial advisor is just that: We don’t know what, or how, we should be saving. Should you pay off student loans early? What about credit card debt? Should you be saving for college, or retirement? We can save you a lot of time here and now. The answer to all of these questions? Yes. Or no.

Or perhaps we aren’t even talking about yes or no questions. What’s your risk tolerance? Until we ask the our financial advisor the question, we likely have no idea.

Questions to Ask Your Financial Advisor: Goals vs. Needs

That’s the thing. It all depends, and that should be one of the questions you ask your financial advisor: What should my financial goals be? How and when should those goals change? And how are those goals different than your financial needs?

A financial need “is something you should look at as a regular expense,” (“Setting Investment Goals”, Wells Fargo):

  • Food
  • Clothing
  • Transportation
  • Rent or mortgage payment
  • Insurance
  • Building emergency savings
    • From Wells Fargo: “A general rule is to set aside six months of living expenses to cover your everyday essentials before you consider investing for the long term.”

A financial goal “is something you plan for, and often can be driven by your financial needs.”

Getting on the Right Path

Identifying what those financial needs are, how they affect your financial goals, and how we should prioritize accordingly are big question marks. Were you to ask your parents, they may say to avoid debt at all costs. But financial and retirement planning are much different now than they were then.

Longer life, more than one employer, how employers are caring for employee financial health, and where your money will be safe are serious considerations now, but weren’t then.

Which is why they should factor into the questions you need to ask your financial advisor. Yes, you ultimately need to address certain questions yourself, but it can be very hard to be objective with our own finances. An advisor can set us on the right path from the get go, speaking to different market trends and asking you the right questions in return.

Talk to HR

Your financial advisor will likely want to talk about your retirement plan(s), the advantages and disadvantages of early retirement, how much disability insurance you need…and yet many of us don’t have a clear picture of what kind of benefits we have through our employer.

“Surprisingly, I’ve found that there are a lot of people who have no idea what their retirement match even is,” says Katie Brewer, a CFP® with LearnVest Planning Services, “so it’s a good idea to spend some time figuring out what you already have in place when it comes to your benefits.” (“9 Great Ways To Prep For A Meeting With A Financial Adviser”, Forbes).

Questions No One Asks Their Financial Advisor

The questions you ask your financial advisor, and the questions they ask us, are important. That said, it can be quite revealing to turn the tables around.

Here are a couple of harmless questions that can provide deeper insight than you’d imagine. The first being, “What was your worst investment decision?” closely followed by, “What was your best investment decision?”

Pay attention to the examples they give—the insight or lack of it. For example, an advisor who doesn’t want to show they ever made a bad investment and gives you a cursory answer may end up hiding something from you in the future. One who laughs about their poor investment but didn’t learn anything could continue to make the same mistake over and over again, but with YOUR account.

Don’t Assume the Worst

Many people hesitate and delay when it comes to meeting with a financial advisor for fear of what they’re going to say, ask, or discover about their financial reality. But truth be told, we aren’t going to know anything until we ask.  

Maybe your finances aren’t as bad as you thought. There’s always room for improvement, and proactively addressing that with your advisor is a good thing. The questions you ask your financial advisor are pivotal to planning for your future.